Pakistan equity market nosedives amid rupee devaluation

KARACHI: The equity market nosedived on Tuesday, amid uncertainty over the rupee depreciation and the upcoming monetary policy, dealers said.

An analyst at Arif Habib Limited said the market tumbled mainly as a result of redemptions at the mutual funds’ end.

“On the other hand, negative news triggers on slippage of [the] rupee parity with USD {dollar], US State Secretary’s hint on revisiting US-Pakistan relations and pending IMF [International Monetary Fund] review had bearing on the Index.”

Selling was observed across-the-board with technology, E&P, cement and steel sectors leading the downside on the index.

The financial results announced on Tuesday also failed to impress the investors. The refinery sector faced the onslaught with the failure in the approval of the Refinery Policy as reported in the newspapers, especially Byco.

The Pakistan Stock Exchange KSE-100 shares index shed 0.8 per cent, or 379.12 points, to close at 46,891.34 points. The KSE-30 shares index shed 1.03 per cent, or 194.11 points, to close at 18,602.86 points.

As many as 525 scrips were active, of which 102 advanced, 411 declined and 12 remained unchanged. The ready market volumes stood at 479.79 million shares, compared with the turnover of 395.8 million shares in the last trading session.

Ahsan Mehanti at Arif Habib Corporation said that the stocks fell across-the-board on the fears over foreign outflows after the MSCI downgrade to the Frontier Market and an uncertainty over the SBP’s monetary policy announcement next week.

“[The] rupee instability, investors’ fear over probable foreign outflows; following the MSCI status downgrade played a catalytic role in the bearish close.”

An analyst at Pearl Securities said the ballooning current account deficit is the main reason behind the rupee weakening, which may compel the policymakers to initiate a monetary tightening cycle.

The companies that reflected the highest gains included Allawasaya Textile, up Rs108.7 to close at Rs1,558.09/share; and AKD Hospitality, up Rs27 to close at Rs387/share.

The companies, which reflected the most losses included Nestle Pakistan, down Rs244.99 to close at Rs6,155.01/share; and Bata Pakistan, down Rs92.24 to close at Rs1,701.12/share.

The highest volumes were witnessed in Byco Petroleum with a turnover of 71.67 million shares. The scrip shed 71 paisas to close at Rs9.08/share; followed by Telecard Limited with a turnover of 51.43 million shares. It gained 48 paisas to close at Rs24.36/share. WorldCall Telecom remained the third with a turnover of 25.35 million shares. It shed 10 paisas to finish at Rs3.2.