Stocks slip as bulls pause for breath

KARACHI: Stocks fell on Tuesday breaking a long winning streak closing below the 49,000 level. The KSE-100 index dropped 173.62 points (0.35 per cent) to close at 48,865.79 points.

Market participants said the trend in the next few days would show if the bulls have taken just a pause or the market is finally undergoing the long-due correction.

The index plunged 352.15 points within the first 15 minutes of the start of trading, but managed to recover from its lows. Some analysts attributed the stocks’ pullback to withdrawal of the fertiliser subsidy and others to a growing concern over the outcome of the apex court hearings on the Panama Papers case.

Pressure was witnessed in the fertiliser sector on the back of news that the federal government had withdrawn subsidy extended to the sector. Engro Fertilisers, Fatima Fertiliser and Fauji Fertiliser were down 5pc, 2.8pc and 2.35pc, respectively. The three stocks cumulatively added 127 points to the day’s decline.

Analysts at JS Global stated that the textile sector extended its gains as long-awaited export package of Rs180 billion was unveiled by the government. Removal of duty on various raw materials, import of industrial machinery, and rebate on various textile segments were some of the incentives announced under the incentive package. Nishat Mills Ltd rose 1.43pc and Nishat Chunian Ltd 1.38pc to become the major gainers of the sector.

The volume of shares traded on Tuesday dropped 16pc to 413m shares while the value was down 3.3pc to Rs20.1bn. Gains to the upside were underpinned by rally in textile, steel, multi-utilities, refineries and cements. Major gainers were MCB Bank whose share increased 2.27pc, Searle Pakistan Ltd 2.33pc, National Refinery 5pc, Lucky Cement 0.67pc and Engro Foods 1.87pc, which together added 104 points to the index.

In addition, Kohinoor Textile rose 1.73pc, International Steels Ltd 2.35pc, Hub Power Company 0.34pc and DG Khan Cement 0.52pc. “However, fertilisers wreaked havoc on market sentiment shedding away 181 points,” Intermarket Securities said.