PSX bearish over geopolitical concerns

KSE-100 index drops 170.13 points, settles at 63,567.34

KARACHI:

Bears proved their dominance in a tug of war with bulls at the Pakistan Stock Exchange (PSX) on Wednesday as the KSE-100 index remained on a downward journey on the back of escalating geopolitical tensions and political uncertainty.

Stocks came under pressure since the beginning of the trading session where tussle between the bears and bulls intensified.

Bulls gave in to selling pressure in the second half, when the market touched its intra-day low at 63,290.18 points amid domestic political noise. Weakening oil prices in the international market further fuelled the bearish momentum at the bourse.

However, expectations of rate cut by the State Bank of Pakistan (SBP) and selective buying in power, energy, fertiliser, auto, tech and cement sectors helped the index make some recovery. But it drifted away from the 64,000 mark and closed in the red.

“Stocks closed lower on geopolitical uncertainty and political noise,” said Arif Habib Corp MD Ahsan Mehanti. “Slump in global equities, weak international crude oil prices and uncertainty about the SBP policy rate announcement this month played the role of catalysts in bearish close of the market.”

At close, the benchmark KSE-100 index recorded a decrease of 170.13 points, or 0.27%, and settled at 63,567.34.

“It was another day of rivalry between bulls and bears,” commented Topline Securities in its report.

Pakistan equities moved in both directions as bullish and bearish forces confronted each other throughout the session to take the helm at the PSX. However, the bears emerged as winners, it said.

Investors chose to switch between selective stocks of power, energy, fertiliser, auto, tech and cement sectors. Resultantly, Hub Power, Pakistan Petroleum, Fauji Fertiliser Bin Qasim, Millat Tractors, TRG Pakistan and Lucky Cement cumulatively lost 236 points.

Read PSX dips below 64,000

On the flip side, Engro Corporation, Engro Fertilisers, Meezan Bank and United Bank collectively added 253 points as they witnessed a rejuvenated buying interest, Topline added.

Arif Habib Limited (AHL), in its review, stated “64,000 is now near resistance with the market being turned away from the day’s high at 64,044”. Focus shifted to 63,000 for signs of support for the remainder of the week, it said.

JS Global analyst Muhammad Shuja Qureshi noted that the KSE-100 index lost 170 points, where selling in the refinery sector dented overall sentiment. “A cautious stance is advised, and investors can accumulate value stocks on dips,” he said.

Overall trading volumes increased to 421.3 million shares against Tuesday’s tally of 407.5 million. The value of shares traded during the day was Rs18.6 billion.

Shares of 332 companies were traded. Of these, 111 stocks closed higher, 203 dropped and 18 remained unchanged.

Pakistan Telecommunication Company was the volume leader with trading in 45.98 million shares, gaining Rs0.45 to close at Rs14.02. It was followed by K-Electric with 41.6 million shares, losing Rs0.2 to close at Rs5.59 and Treet Corp with 36.4 million shares, gaining Rs1.06 to close at Rs20.05.

Foreign investors were net sellers of shares worth Rs620.9 million, according to the NCCPL.

Published in The Express Tribune, January 18^th, 2024.

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