Market watch: Rupee fall, political turbulence pull stocks down

Benchmark KSE-100 index dives 641.21 points to settle at 42,863.15

KARACHI:

The Pakistan Stock Exchange witnessed selling pressure on Wednesday, following rupee’s fall to an all-time low amid political turbulence, which dragged the benchmark KSE-100 index below the 43,000-point mark.

Moreover, concerns about terms of the resumed IMF loan programme and delay in approval of Saudi Arabian aid package also contributed to the bearish close of the market.

Some value buying before the end of trading lifted the index, but still it closed on a negative note, losing 641 points.

The rupee dipped to an all-time low in the inter-bank market, standing at Rs190.02 against the dollar.

Earlier, the stock trading kicked off on a positive note, however, volatility emerged immediately afterwards, which erased the gains. Weak investor sentiment, coupled with fresh depreciation of the rupee and political uncertainty, pushed the index down.

At close, the benchmark KSE-100 index recorded a decrease of 641.21 points, or 1.47%, to settle at 42,863.15 points.

Topline Securities, in its report, said that Pakistan equities closed in the red where the benchmark KSE-100 index settled at 42,863, down 1.47%.

After trading sideways earlier in the day, the market skidded, touching an intra-day low of 1,110 points over uncertain economic and political conditions, it said.

“Moreover, higher international commodity prices and increasing dollar value kept investors’ confidence in check. A selling spree was witnessed across the board to which the major contributors were Hubco, Fauji Fertiliser Company, UBL, Systems Limited and Dawood Hercules,” Topline said.

Traded volume and value increased 45% and 35% on a day-on-day basis to 338.3 million shares and Rs9.52 billion respectively. WorldCall Telecom was the volume leader with 31.4 million shares changing hands, it added.

A report of Arif Habib Limited stated that stocks fell across the board in the post-earnings season as investors weighed the impact of plunge in rupee’s value, surging energy prices and dismal data of cement and fertiliser sales for April 2022.

“Slump in global equities, uncertainty over terms of resumed IMF programme and delay in approval of $7.4 billion Saudi aid package played the role of catalyst in the bearish close,” it said.

JS Global analyst Mohammad Waqar Iqbal said that the bourse remained under pressure throughout the day due to instability on the political front, concerns over inflation and the lack of clarity about the resumption of IMF programme.

The KSE-100 index faced selling pressure across the board and it closed at 42,863, losing 641 points day-on-day.

“Going forward, we expect range-bound activity to continue and recommend investors to stay cautious and wait until clarity emerges on the economic front,” said the analyst.

Overall trading volumes increased to 338.5 million shares compared with Tuesday’s tally of 233.9 million. The value of shares traded during the day was Rs9.5 billion.

Shares of 359 companies were traded. At the end of the day, 47 stocks closed higher, 296 declined and 16 remained unchanged.

WorldCall Telecom was the volume leader with 31.4 million shares, losing Rs0.1 to close at Rs1.49. It was followed by Cnergyico PK with 24.8 million shares, losing Rs0.43 to close at Rs5.26 and Pak Elektron with 16.8 million shares, losing Rs0.76 to close at Rs15.73.

Foreign institutional investors were net buyers of Rs143.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.