Pakistan Stock Exchange (PSX) faced a downward trajectory on Monday as it recorded a modest fall of over 250 points amid ongoing political uncertainty ahead of general elections early next month.
As trading commenced, the KSE-100 index moved up but it quickly reversed the movement with a dip. It once again started climbing and reached the intra-day high at 65,069.43 points before midday.
Afterwards, the index fell rapidly due to profit-taking when investors reacted to the political noise by trimming their positions, particularly in banking, exploration and production (E&P), tech and oil marketing companies’ (OMC) sectors.
Additionally, the market’s descend was attributed to caution ahead of the International Monetary Fund’s (IMF) board meeting, uncertainty about the State Bank of Pakistan’s (SBP) monetary policy announcement, worries about high inflation and geopolitical tensions.
Consequently, a bearish momentum took hold, pushing the index to the intra-day low at 64,183.52 points before close, which erased all prior gains.
“Stocks closed lower amid ongoing political uncertainty ahead of general elections next month,” said Arif Habib Corp MD Ahsan Mehanti.
“Uncertainty before the IMF board meeting and SBP’s policy rate announcement in the wake of surging inflation as well as concerns over geopolitical risks played the role of catalysts in bearish close of the market.”
At close, the KSE-100 index recorded a modest decrease of 277.87 points, or 0.43%, and settled at 64,237.03.
Topline Securities, in its report, highlighted that Pakistan equities floated in both directions. Initially, the KSE-100 index hit its intra-day high at 65,069, however, profit-taking at that level forced the index to give up all earlier gains.
Read Despite volatility, PSX achieves high growth
Owing to increasing noise on the political front regarding upcoming elections, investors opted to trim their positions by booking profit in selective stocks of banking, E&P, tech and OMC sectors, it said. Resultantly, United Bank, Pakistan Petroleum, Oil and Gas Development Company, TRG Pakistan and Pakistan State Oil lost 200 points collectively, Topline added.
Arif Habib Limited (AHL), in its review, stated “the market seems to be working its way into support before resuming its move towards higher levels.”
The advancers-to-decliners ratio stood at 26:66 with Engro Corporation (+6.34%) and Engro Fertilisers (+3.57%) contributing the most to index gains while United Bank (-2.3%) and Pakistan Petroleum (-1.84%) contributing the most to the decline, AHL said.
Overall trading volumes decreased to 484.01 million shares against Friday’s tally of 949.6 million. The value of shares traded during the day was Rs12.7 billion.
Shares of 358 companies were traded. Of these, 104 stocks closed higher, 223 dropped and 31 remained unchanged.
K-Electric was the volume leader with trading in 168.8 million shares, losing Rs0.22 to close at Rs5.90. It was followed by WorldCall Telecom with 21.98 million shares, losing Rs0.03 to close at Rs1.44 and Pakistan International Airlines Corp with 17.9 million shares, gaining Rs0.23 to close at Rs8.36.
Foreign investors were net buyers of shares worth Rs45.9 million, according to the NCCPL.
Published in The Express Tribune, January 9th, 2024.
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