PSX slumps on pre-poll uncertainty
Bears took the driving seat at the Pakistan Stock Exchange (PSX) on Friday as political uncertainty and the falling foreign exchange reserves triggered a deep correction, leading to a plunge of nearly 1,000 points in the KSE-100 index.
The market gave up all of the previous day’s modest gains over political tensions as Pakistan Tehreek-e-Insaf’s founder Imran Khan was granted bail in the high-profile cipher case.
In the morning, trading commenced on a positive note and soon the KSE-100 hit the intra-day high at 62,995.21 points. The market remained range-bound in the first half.
However, concerns over the mounting power sector circular debt and the increase in industrial power tariffs dented investor interest. Additionally, the latest fall of $136 million in Pakistan’s foreign exchange reserves to below $7 billion and pre-election uncertainty took their toll on the market.
Consequently, in the last hour of trading, the index dropped to the intra-day low at 61,569.13 points. There was some recovery before the close of trading but still the market lost nearly 1,000 points.
“Stocks fell sharply in late-session pressure over pre-poll uncertainty and concerns about the surging industrial power tariff to resolve the circular debt crisis,” said Arif Habib Corp MD Ahsan Mehanti.
“High leverage positions at the PSX and the high leverage cost also played the role of catalysts in bearish close of the market.”
At close, the benchmark KSE-100 index registered a slump of 988.47 points, or 1.58%, and settled at 61,705.09.
Topline Securities, in its report, wrote that the KSE-100 index remained range bound during the first half of trading ahead of a long weekend. “However, selling was observed in the second half as the index declined to close at 61,705, down 1.58%,” it said.
Investor participation declined with average traded volumes and value standing at 671 million shares and Rs13.7 billion respectively.
Pakistan Petroleum, Habib Bank, Oil and Gas Development Company, Hub Power and TRG Pakistan lost ground, weighing down the index by 324 points, Topline added.
Arif Habib Limited (AHL), in its review, noted that the PSX witnessed a big fall during the current week with the KSE-100 index losing 6.7% week-on-week (WoW).
“The last session before a long weekend saw the KSE-100 fall 1.58%. The advancers-to-decliners’ ratio remained skewed at 20:77,” it said.
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Key upside movers were Habib Metropolitan Bank (+1.09%), Pakistan Aluminium Beverage Cans (+3.32%) and Interloop Limited (+1.06%) while the biggest decliners were Pakistan Petroleum (-4.06%), HBL (-3.12%) and Oil and Gas Development Company (-2.29%).
“The 61k level was low for the week and is likely to stay next week. A breach and close back above 61k will be bullish,” AHL observed.
JS Global analyst Mubashir Anis Naviwala said that the bourse witnessed a sharp correction and the KSE-100 moved between a high and low of 62,995 and 61,569 points, respectively.
Traded volumes stood at 672 million shares where K-Electric (-7.5%), Fauji Foods (+5.5%), Cnergyico PK (-4.4%), WorldCall Telecom (-2.5%) and Kohinoor Spinning Mills (-4.8%) were the volume leaders.
“Going forward, we recommend investors to stay cautious at current levels and wait for dips for any fresh buying,” the analyst added.
Overall trading volumes decreased to 671.6 million shares against Thursday’s tally of 812.4 million. The value of shares traded during the day was Rs13.7 billion.
Shares of 352 companies were traded. Of these, 116 stocks closed higher, 226 dropped and 10 remained unchanged.
K-Electric was the volume leader with trading in 113.99 million shares, losing Rs0.42 to close at Rs5.18. It was followed by Fauji Foods with 85.99 million shares, gaining Rs0.6 to close at Rs11.47 and Cnergyico PK with 70.1 million shares, losing Rs0.24 to close at Rs5.25.
Foreign investors were net sellers of shares worth Rs57.3 million, according to the NCCPL
Published in The Express Tribune, December 23rd , 2023.
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