Stocks snap three-day rally to lose 224 points

KARACHI: Stocks snapped the three-day rally on Friday. The KSE-100 index slipped 224 points (0.55 per cent) and closed at 40,807 which was scarcely surprising as a correction was due after the earlier three sessions that ended in cumulative gains of a massive 1,409 points and 3.49pc.

The market opened in the negative on Friday by 54 points and remained in the red for much of the trading time.

The market had already absorbed the State Bank of Pakistan monetary policy that kept the policy rate unchanged at 7pc; the new cases of Covid-19 turning out at over 3,000 for the third day; shortened business hours for shops, restaurants and other public spaces. But investor sentiments received a boost by the Prime Minister’s assertion that there would be no complete lockdown as he believed the number of people who might die from hunger would outnumber those that fall prey to the pandemic.

However, the government was not quite at ease over the continuing protest rallies by the opposition alliance.

Buying activity in pharmaceuticals, automobile assemblers, refineries and technology sectors helped the index from sinking deeper in the red. The stocks in the heavyweight exploration & production sector remained subdued due to the drop in international oil prices.

Pakistan Oilfields Ltd, Oil and Gas Development Company (OGDC) and Pakistan Petroleum Ltd (PPL) all ended as big losers. Cement stocks also went under profit taking due to slow dispatches with the approach of winter.

Analyst Ahsan Mehanti at Arif Habib Ltd said that the stocks were consolidating in the post-earning season. Pressure in global equity markets and drop in international oil prices also kept investors in check.

Traded volumes stepped up by 2pc over the previous day to 398 million shares. However, traded value declined 18pc to $83m. Among scrips, Unity Foods Ltd (UNITY) led the volumes with 53m shares, followed by TRG Pakistan 46m, shares and K-Electric 23m shares.

Major downside pull to the index came from PPL, Lucky Cement, OGDC, Engro Corporation and Hub Power Company Ltd, which collectively eroded 123 points from the index. On the flip side, TRG Pakistan, Millat Tractors, Colgate and UNITY salvaged the index from sinking deeper.