Stocks falter despite lower deficit

at the Pakistan Stock Exchange on Wednesday and the benchmark KSE100 index shed 28.80 points amid a lack of positive triggers, an uncertain political environment and the rollover week. The State Bank of Pakistan (SBP) reported that the country recorded a current account deficit (CAD) of $1.2 billion in July, which was significantly lower than the June level.

 However, the encouraging development failed to entice investors to keep up the uptrend and the market could not sustain the positive momentum. Political instability owing to the tussle between the opposition and the government impacted the investment climate. Pakistani currency depreciated 0.33% against the US dollar in the inter-bank market, which further undermined the investor interest. Profit-taking in the last trading hour contributed to bearish close of the market.

Earlier, the KSE-100 index jumped as soon as trading began, touching intra-day high of 43,684.11 points. However, the bullish spell ended around midday as the market entered the negative territory. From that point onwards, the bearish pressure continued to haunt the market, where the index ended the day on a negative note after touching intra-day low of 43,299.48 points. At close, the benchmark KSE-100 index recorded a decrease of 28.80 points, or 0.07%, to settle at 43,337.97. Topline Securities, in its report, said that a mixed day was observed at Pakistan equities market where the KSE-100 index moved in the range of 384 points.

During the session, the benchmark index touched an intra-day high at 43,684 (+317 points; or 0.73%) and an intra-day low at 43,300 (-67 points; or 0.15%) before eventually settling at 43,334 (-28 points; or 0.07%), it said. Miscellaneous, cement, fertiliser and exploration and production (E&P)-sector stocks contributed negatively to the index where Pakistan Services, Lucky Cement, Dawood Hercules, Fauji Fertiliser Company and Pakistan Petroleum Limited lost 111 points cumulatively.

On the flip side, Systems Limited, Engro Corporation and Hub Power witnessed some buying interest as they added 114 points collectively, Topline said. Around 256 million shares were traded at the bourse while total value came in at Rs8.7 billion. Hascol Petroleum led the volumes chart with trading in 27 million shares, the report added. Arif Habib Limited, in its report, said that a rangebound session was observed in the stock market due to the roll-over week. The benchmark KSE-100 index opened in the positive zone but sluggish activity was witnessed throughout the day, it said.

In the last trading hour, profit-taking was observed, which led the index to close in the red zone. Volumes remained dry in the main board, although healthy volumes were witnessed in third-tier stocks. The index closed at 43,337.97 points, down 28.80 points (-0.07%). Sectors contributing to the performance included cement (-43.8 points), miscellaneous (-43.5 points), investment banks (-19.1 points), textile composite (-12.2 points) and E&P (-12.1 points), the report said.

JS Research analyst Mubashir Anis Naviwala said that a roller-coaster ride was witnessed during Wednesday’s trading session. The index eventually closed at 43,338, losing 29 points day-on-day. Total volume was recorded at 256 million shares where Hascol Petroleum (-1.7%), K-Electric (1.5%), Pakistan International Airlines Corp (8.3%), Bank Alfalah (1.1%) and TPL Properties (0.2%) were the major contributors. “We recommend investors to adopt a buy-on-dips strategy in tech, E&P and cement sectors,” the analyst said. Overall trading volumes decreased to 256.5 million shares compared with Tuesday’s tally of 324.4 million.

The value of shares traded during the day was Rs8.7 billion. Shares of 342 companies were traded. At the end of the day, 129 stocks closed higher, 184 declined and 29 remained unchanged. Hascol Petroleum was the volume leader with 27 million shares, losing Rs0.12 to close at Rs6.82. It was followed by K-Electric with 20.8 million shares, gaining Rs0.05 to close at Rs3.45 and Pakistan International Airlines Corp with 13.5 million shares, gaining Rs0.41 to close at Rs5.35. Foreign investors were net sellers of Rs388.9 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.