Stocks stumble as Senate seeks election delay
PHOTO: FILE
A wave of uncertainty engulfed the Pakistan Stock Exchange (PSX) on Friday, triggered by unexpected political shifts. The benchmark KSE-100 index witnessed significant fluctuations, tumbling notably as news of the senate approving a resolution seeking a delay in general elections surfaced.
The first half of the trading session saw a range-bound market, with optimism prevailing as K-Electric signed a 10-year agreement with the government to supply electricity to the national grid. This news propelled the market to an intra-day high at 65,077.48 points.
However, volatility took hold later in the session, leading to a sharp decline in stock prices, and the market hit an intra-day low of 63,757.96 points. The senate’s resolution seeking election delay, citing security concerns, contributed to this downturn.
Despite a midday recovery driven by the rejection of the poll delay attempt by mainstream parties, the market failed to regain positive momentum and closed the week on a negative note.
Arif Habib Corp MD Ahsan Mehanti attributed the market’s bearish close to political uncertainty and concerns regarding financial losses in State-Owned Entities (SOEs). The senate’s resolution, if implemented, is expected to impact talks with the International Monetary Fund (IMF) and overall political stability.
At the close, the KSE-100 index recorded a marginal decrease of -124.26 points or -0.19%, settling at 64,514.90.
Arif Habib Limited (AHL) reported a continued recovery at the PSX, with a +3.30% gain week-on-week from the previous week’s 60,000 level. The outlook suggests positivity for equities in the coming week, with anticipated support at 63,000 and resistance at 65,000.
The market observed a ratio of 53 advancers to 41 decliners. K-Electric (+8.32%) made a significant positive contribution following the 10-year agreement with the government. Major drags on the index were Fauji Fertiliser (-1.5%), Engro (-1.39%), and Pakistan Services (-5.44%), the ALH report added.
Read Stocks end flat over continuous volatility
JS Global analyst Muhammad Shuja Qureshi noted that panic selling due to election-related news turned market sentiment negative, resulting in a loss of 124 points for the KSE-100 index.
Despite the overall downturn, selective stocks, including Honda Atlas Cars, Pak Suzuki Motors, and Sazgar Engineering Works, closed with notable gains. Other gainers included Atlas Battery, Exide Pakistan, Searle, and Shell Pakistan.
Topline Securities highlighted that the KSE-100 index traded mostly in the positive zone during the first half of the session but faced pressure in the second half due to the senate’s resolution for election delay. Although some recovery was observed in the eleventh hour as investor’s weighed in the fact that the resolution was passed with thin attendance and is thus non-binding, the index closed at 64,515, down by -0.19%.
Overall trading volumes increased to 949.56 million shares, with a total value of Rs19.4 billion.
Shares of 362 companies were traded. Of these, 161 stocks closed higher, 187 dropped and 14 remained unchanged.
K-Electric was the volume leader with 481.2 million shares trading, gaining Rs0.47 to close at Rs6.12. KE was followed by WorldCall Telecom with 33.4 million shares, losing Rs0.01 to close at Rs1.47 and Bank of Punjab with 28.5 million shares, losing Rs0.07 to close at Rs6.92.
Foreign investors were net buyers of shares worth Rs17.5 million, according to the National Clearing Company of Pakistan Limited (NCCPL).
Published in The Express Tribune, January 6th, 2024.
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