Depression persisted at the capital market on Tuesday for the second consecutive session with investors listless and uncertain on budgetary measures and approval, SBP policies, and establishment of treasury single account, dealers said. stocks
Saad Hashmey, economist at Topline Securities, said, “The market remained dull and extended losses for the second consecutive day because of uncertainty regarding passage of budget through the Senate.”
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Also, applicability of treasury single account would negatively affect earnings of select banks, which kept the financial stocks volatile. Furthermore recent sharp movements in currency markets have served to reduce attractiveness of equities, he added.
Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 1.39 percent or 487.10 points to close at 34,681.72 points level. KSE-30 shares index followed suit with a low of 1.44 percent or 239.66 points to end at 16,354.85 points level.
Of 319 active scrips, 61 moved up, 239 retreated, and 19 remained unchanged. The ready market volumes stood at 104.130 billion shares, as compared with the turnover of 128.136 billion shares in the previous session.
Muhammad Faizan, head of foreign institutional sales at Next Capital Limited, said, “The news reports of an increase in cement prices by Rs20/bag in the northern region failed to excite investors, leading to a drop in the stock prices of cement stocks where DG Khan closed lower 4.03 percent while Lucky decreased 1.96 percent, and Maple Leaf slid down 4.13 percent.”
The rupee gained some strength against the dollar after seven days of consecutive decline. The US dollar traded 51 paisa lower at 156.45, while closing witnessed around Rs156.80, showing small recovery, Faizan added.
Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks closed lower amid thin trade on economic and political uncertainty.”
Falling global crude oil prices, investor concerns for foreign outflows, rupee instability and uncertainty over SBP policies to meet conditions of $6 billion IMF bailout package ahead of IMF board approval on July 3 played a catalytic role in the bearish close, Mehanti added.
The capital market further slipped and closed below 35,000 level indicating that the index might see more downward correction in the coming days because the events have been mostly listless. The political temperature and talks that the government would face problems in getting the federal budget approved for 2019-20 cast dark shadow in the minds of the investors, trimming share values.
Moreover, a leading trader said that worries of new taxation measures and drive against evaders to squeeze liquidity from the market was evident as heavy selling was witnessed in blue chips and trading stocks.
The highest gainers were Pakistan Tobacco, up Rs23.71 to close at Rs2,592.71/share, and Sunrays Textile, up Rs9.18 to finish at Rs196.18/share.
Companies that booked highest losses were Unilever Foods, down Rs286.25 to close at Rs5,438.75/share, and Nestle Pakistan, down Rs237.70 to close at Rs6,752.29/share.
Maple Leaf recorded the highest volumes with a turnover of 14.727 billion shares. The scrip lost Rs1.09 to close at Rs25.29/share.
The lowest volumes were witnessed in Fauji Cement, recording a turnover of 2.859 million shares, whereas the scrip lost Rs0.46 to end at Rs16.08/share.
(This news/article originally appeared in The News on June 19th, 2019)