Market watch: KSE-100 falls owing to bearish global markets

Benchmark index drops 281.7 points to settle at 46,348.18

KARACHI:

Bears on Thursday gripped the Pakistan Stock Exchange as a dip in international stock markets, driven by inflationary fears, impacted trading at the local bourse.

Inflation in the US soared to a 30-year high, which renewed fears of a further hike in global prices of commodities and triggered stock selling in the international markets. Its trickle-down effect was felt in Pakistan as well where the benchmark KSE 100-share Index shed 282 points in a lacklustre session.

On the domestic front, there was no respite from the rupee’s fall as it lost more ground and inched closer to the all-time low touched in late October 2021.

Investors were discouraged by the stalemate in negotiations between Pakistan and the International Monetary Fund (IMF) over the resumption of $6 billion loan programme and offloaded their holdings.

Earlier, the trading session kicked off on a positive note, however, selling pressure pulled it down and the market was trading with minor ups and downs towards midday. Acceleration in profit-taking towards the end of trading dragged the index into the red zone and as a result it closed with a modest loss.

At close, the benchmark KSE-100 index recorded a decrease of 281.70 points, or 0.6%, to settle at 46,348.18.

Arif Habib Limited, in its report, stated that the market opened on a positive note but remained dull in the first half of the session.

Concerns over inflation and weakening of Pakistani rupee against the US dollar created uncertainly, preventing investors from taking fresh positions, which eventually resulted in profit-booking on last day positions in the second half of the session.

Stock accumulation was witnessed in the banking sector as market participants expected a rate hike in the upcoming monetary policy.

The market continued to trade sideways and registered hefty volumes in third-tier stocks. On the flip side, institutional activity remained lacklustre, the report said.

JS Global analyst Waqar Iqbal said that Thursday’s session began on a positive note where the market saw an intra-day high of 46,844, up 214 points.

However, the index failed to sustain the momentum in later hours after the rupee was reported at Rs173.8 against the dollar, which pulled the index down to close at 46,348.

Total traded volumes stood at 269 million shares with Ghani Global Holdings (-3.2%), Service Fabrics (+5.7%), Telecard Limited (-1.8%), TPL Properties (-1.3%) and Waves (-2.9%) being the highest contributors.

“In the coming days, the market’s direction will likely be contingent on the outcome of IMF negotiations,” the analyst said.

Overall trading volumes dropped to 269.5 million shares compared with Wednesday’s tally of 320.3 million. The value of shares traded during the day was Rs9.5 billion.

Shares of 352 companies were traded. At the end of the day, 95 stocks closed higher, 232 declined and 25 remained unchanged.

Ghani Global Holdings was the volume leader with 30.2 million shares, losing Rs1.05 to close at Rs32.19. It was followed by Service Fabrics with 20.5 million shares, gaining Rs0.65 to close at Rs12.09 and Telecard Limited XB with 14.3 million shares, losing Rs0.34 to close at Rs18.97.

Foreign institutional investors were net sellers of Rs368.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.