Stocks turn in depressed performance
KARACHI: After scaling an all-time high overnight, the benchmark KSE 100 index faltered despite a positive start on Tuesday amid reports of oil refining units shutting down and Shanghai Electric Power’s withdrawal of an offer to buy K-Electric.
Ahsan Mehanti of Arif Habib Corporation attributed the depressed market performance to the expectations of prudent SBP monetary policy announcement next week ahead of new IMF loan talks and strong opposition to the petroleum price deregulation model by the refineries which have started closing down their units amid storage constraints and weak sales due to rampant smuggling.
He said there was uncertainty over Pakistan-US relations following the signing of trade pacts with Iran to increase bilateral annual trade volume to $10 billion over the next five years, dampening investor sentiments.
Topline Securities Ltd said equities began the day on a positive note, with across-the-board buying in cyclical stocks, especially in the cement sector, in the backdrop of the current surplus of $619m and anticipation of inflation clocking in at 17-18pc for April.
It said the street expectations are scattered from “status quo” to a 50-100bps cut in the SBP policy rate, and any reduction would further fuel the recent bullish momentum at the stock market.
However, at the day’s high level, some investors opted to take profits, dragging the market into the red.
The cement, bank, and automobile sectors contributed positively to the index, as Lucky Cement, United Bank Ltd, Habib Bank Ltd, Millat Tractor Ltd and Maple Leaf Cement added 161 points, cumulatively.
On the other hand, Meezan Bank, Faysal Bank Ltd, and Oil and Gas Development Company Ltd received some beating, losing 135 points cumulatively.
As a result, the index hit the day’s high at 71,861.18, gaining 413 points, but closed in the red at 71,359.41 points after losing 74.06 points, or 0.10pc from the preceding session.
The overall trading volume stayed flat at 655.93 million shares. However, the traded value dipped 21.64pc to Rs24.48bn on a day-on-day basis.
Stocks contributing significantly to the traded volume included K-Electric (67.16m shares), PIBTL (46.34m shares), Fauji Cement Company Ltd (45.92m shares), Pak Elektron Ltd (41.28m shares) and Maple Leaf Cement Factory Ltd (24.16m shares).
Foreign investors remained net buyers as they picked shares worth $1.24m.
Published in Dawn, April 24th, 2024