Negative sentiment prevailed at the Pakistan Stock Exchange (PSX) on Monday, in the backdrop of dwindling foreign exchange reserves, delay in funds flow from Saudi Arabia and continued political instability in the country.
The benchmark KSE-100 index opened in the green but bears gained control and the market remained at the losing end.
Pakistan’s foreign currency reserves may have gone below $5 billion following the repayment of a big loan, which spooked investors in the market.
At close, the benchmark KSE-100 index recorded a decrease of 502.76 points, or 1.23%, to settle at 40,504.76.
Topline Securities, in its report, noted that Pakistan equities witnessed a selling spree across the board.
“The KSE-100 index opened in the green zone, hit an intra-day high at 41,075 (+67 points, or 0.16%) but could not continue the buying momentum on the back of no announcement regarding funds flow from Saudi Arabia, the UAE or other friendly countries,” it said.
“The repayment of a commercial loan of over $1 billion over the last weekend may likely push State Bank of Pakistan’s foreign exchange reserves below the $5 billion mark, if Pakistan does not get any funds from the donor conference, IMF and any friendly country,” it added.
All the aforesaid vulnerabilities kept investors on the selling side, which led the benchmark index to settle at 40,505.
Tech, bank, fertiliser and cement-sector stocks contributed negatively to the index where TRG Pakistan, Habib Bank, Engro Corporation, Bank AL Habib and Lucky Cement lost a total of 208 points. On the flip side, Pakistan Petroleum, Oil and Gas Development Company and Nestle saw some buying interest as they added 108 points, Topline added.
Arif Habib Limited, in its report, noted that following the return of business week, the bears had a successful day at the PSX.
“The benchmark KSE-100 index opened in the green but bears gained control and drove the index down to 502.76 points at the close of trading,” it said.
“Market sentiment remained negative due to the current political and economic instability as well as the notification about TRG’s judicial proceedings, which further escalated the bearish scenario, pushing the index down by 570.70 points during intra-day trading.”
However, the investors continued value hunting with focus on the exploration and production (E&P) sector in expectation of the resolution of gas-sector circular debt.
The index closed at 40,504.76, down by 502.76 points (-1.23% day-on-day). Sectors contributing to the performance included commercial banks (-162.8 points), technology and communications (-105.3 points), cement (-74.2 points), fertiliser (-73.1 points) and power generation and distribution (-36 points), the AHL report added.
JS Research analyst Sara Saeed said that selling pressure was witnessed throughout the day where the KSE-100 closed at 40,505, losing 503 points. “The bearish trend is expected to continue and therefore we recommend investors to avail this downside as a buying opportunity in the technology sector,” she added.
Overall trading volumes decreased to 163.9 million shares compared with Friday’s tally of 181.98 million. The value of shares traded during the day was Rs6.9 billion.
Shares of 328 companies were traded during the day.
At close, 62 stocks closed higher, 247 declined and 19 remained unchanged.
Pakistan Refinery was the volume leader with trading in 17.6 million shares, losing Rs0.06 to close at Rs13.75. It was followed by Pakistan Petroleum with 13.97 million shares, gaining Rs2.94 to close at Rs78.99 and Cnergyico PK with 12.4 million shares, losing Rs0.14 to close at Rs3.91.
Foreign investors were net buyers of Rs115.72 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
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