PSX opens week on bearish note

KSE-100 index falls 368.26 points, settles at 64,269.38

KARACHI:

Pakistan Stock Exchange (PSX) faced significant bearish pressure at the beginning of the week as it lost over 350 points owing to pre-election uncertainty and Senate proceedings for potential postponement of general elections next month.

In the morning, the bourse commenced trading on a robust note, reaching its intra-day peak at 65,173.87 within the first hour. However, as the day progressed, the index gradually declined on account of political noise and geopolitical uncertainty.

Additionally, the State Bank of Pakistan’s (SBP) policy rate announcement later this month amid an elevated inflation was a key contributing factor to the bearish sentiment.

Lack of investor interest in key sectors took the index into the red zone as it fell below the 65,000 mark to the intra-day low at 64,130.95 points, eroding all prior gains.

As a result, the day concluded on a bearish note, with the index registering a 0.57% decrease.

“Stocks closed bearish amid pre-poll uncertainty and concerns over the outcome of Senate resolutions for postponing general elections due next month,” said Arif Habib Corp MD Ahsan Mehanti.

“Political noise, geopolitical worries and uncertainty about the SBP policy rate announcement this month amid high inflation played the role of catalysts in bearish close of the market.”

At close, the benchmark KSE-100 index recorded a decrease of 368.26 points, or 0.57%, and settled at 64,269.38.

Topline Securities, in its report, noted that at the beginning of the week, Pakistan equities exhibited a positive trend, reaching the intra-day peak at 65,174. However, as the trading session unfolded, sellers entered the market, leading to a gradual erasing of the earlier gains.

Consequently, Engro Fertilisers, Pakistan Petroleum, Systems Limited, Lucky Cement and DG Khan Cement collectively contributed to a decrease of 157 points in the index, it said.

Read PSX closes flat over late profit-taking

Arif Habib Limited (AHL), in its review, stated “the market remains range bound and unable to break higher despite some recent positive triggers.”

Advancers-to-decliners ratio stood at 22:77 with Hub Power (+1.63%) and Oil and Gas Development Company (+2.16%) contributing the most to index gains. Engro Fertilisers (-2.45%) and Pakistan Petroleum (-1.25%) were the biggest drags, AHL said.

JS Global analyst Muhammad Shuja Qureshi noted that the market gave up early gains and closed down by 368 points at 64,269.

“Buying was witnessed in Oil and Gas Development Company, Pakistan Petroleum and Pakistan State Oil, which propelled the index above the 65,000 level. However, the lack of interest in other key sectors pushed the market into the red zone,” the analyst said.

“Going forward, we suggest accumulating value stocks on dips,” he added.

Overall trading volumes decreased to 382.01 million shares against Friday’s tally of 643.3 million. The value of shares traded during the day was Rs14.1 billion.

Shares of 363 companies were traded. Of these, 96 stocks closed higher, 249 dropped and 18 remained unchanged.

K-Electric was the volume leader with trading in 55.03 million shares, losing Rs0.18 to close at Rs5.85. It was followed by Pakistan International Bulk Terminal with 37.7 million shares, losing Rs0.48 to close at Rs7.09 and WorldCall Telecom with 25 million shares, losing Rs0.04 to close at Rs1.38.

Foreign investors were net sellers of shares worth Rs4.6 million, according to the NCCPL.

Published in The Express Tribune, January 16^th, 2024.

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