Stocks dip ahead of monetary policy

Bears dominated the proceedings at Pakistan Stock Exchange (PSX) on Friday and pulled the KSE-100 index down by over 400 points ahead of the monetary policy announcement.

Uncertainty prevailed even after crunch talks on the stalled International Monetary Fund (IMF) loan programme, which piled pressure on investors.

Investor confidence remained weak ahead of the monetary policy review on Monday, with expectations of a significant hike. As a result, they refrained from taking fresh positions.

At close, the benchmark KSE-100 index recorded a decrease of 423.60 points, or 1.09%, to settle at 38,407.98.

Topline Securities said that a range-bound activity was observed during the first half of trading. However, the market came under pressure during the second half as the index declined and closed at 38,408 (down by 1.09%).

“This decline can be attributed to a further increase in T-bill and PIB yields in the secondary market ahead of the monetary policy announcement on Monday, where the market expects the policy rate to be increased in the range of 100-200bps,” it said.

Arif Habib Limited said that a negative session was recorded at the PSX. “The market opened in the green but bears rapidly took control, driving the index into the red through the first session, as investor participation was low due to the uncertainty surrounding the talks on reviving the IMF programme,” it said.

The second session began with the same negative sentiment. Due to the weekend, investors booked profit that led the market to an intra-day low of 539.88 points.

Overall trading volumes decreased to 93.4 million shares compared with Thursday’s tally of 157.8 million. The value of shares traded during the day was Rs3.5 billion.

Shares of 314 companies were traded. At close, 103 stocks closed higher, 194 declined and 17 remained unchanged.

Pakistan Petroleum was the volume leader with trading in 8.3 million shares, losing Rs1.16 to close at Rs72.92. It was followed by WorldCall Telecom with 5.6 million shares, losing Rs0.02 to close at Rs1.11 and Ghani Chemical (B) with 5.1 million shares, losing Rs0.53 to close at Rs6.68.

Foreign investors were net buyers of Rs212 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.