Crawling economic activity dampens investor sentiments


Benchmark100 displayed a downward trend amidst deteriorating law and order situation prevalent in the economic hub of Pakistan. Fears of further damage to the crawling economic activity dampened investor sentiments as the index shed 92 points with lackluster volumes of 65 million shares. Influence of thinly traded stocks added further fuel to the wary investor outlook.
The KSE 100 index closed at 12441.40 levels with the loss of 92.15 points and total volume stood at 55,993,047 along with the total value of 2,948,976,846. A mere 55 shares were traded for Nestlé, with lower circuit breaker contributing the most to the index’s downfall. Amongst oil and gas sector stocks, POL led the board despite correction curtailing the gains while the fertiliser sector witnessed profit taking as bellwether stocks closed in the red zone. Investors should remain cautious as the broader index performance remains distorted by thinly traded stocks.
Despite volumetric activity in JSCL and gaining spree in the Fauji group, stocks from fertiliser sector that duly inspired speculative activity in various E&P stocks, high in KSE-100 stayed confined to 20 points, due to low trade lower lock in Nestlé, however KSE-30 did witness a rise of 89 points. Selling on strength and absence of follow-up however disallowed early gains to sustain, thereby forcing massive price erosion in post midday trade led by high priced stocks and duly followed by various mid-tier stocks.
Intraday dips in stocks, likely to continue growing earnings and dividend stream, did invite accumulation with limited options. Prolonged stagnation and negative news flows on political and law & order front might force local equities to undergo further adjustment, therefore the recommendation is to stay poised towards dividend yielding stocks, said Hasnain Asghar Ali at Aziz Fidahusein. It is therefore recommended to stay focused on stocks likely to stay away from the shadows of various fatal issues on both macro and micro fronts, he added.