Pakistan Stock Exchange (PSX) continued its losing streak on Tuesday as it dropped over 900 points owing to growing concerns over political noise and security challenges ahead of elections in the country.
Despite the beginning of trading on a promising note, marked by the intra-day high of 63,074.51 points, the KSE-100 index was unable to sustain the momentum and began a rapid descend before midday.
The bearish streak was exacerbated by apprehensions about the weak economic outlook and pending fiscal reforms for the loss-making state-owned enterprises (SOEs).
In addition, the power sector’s circular debt and reports of six-month budget deficit surging to 2.3% of gross domestic product (GDP) further aided the downward pressure on the index.
Resultantly, in the absence of positive triggers, the market fell to the intra-day low at 61,637.62 points, falling even below the psychologically significant 62,000 mark.
The bourse closed the day somewhat above its lowest point but registered substantial losses.
“Stocks fell sharply on investor concerns over political noise and security unrest in the country,” said Arif Habib Corp MD Ahsan Mehanti.
“Weak economic outlook, pending fiscal reforms for loss-making SOEs, power sector circular debt and reports of six-month budget deficit soaring to 2.3% of GDP played the role of catalysts in bearish close of the market.”
At close, the benchmark KSE-100 index recorded a plunge of 931.98 points, or 1.48%, and settled at 61,841.74.
Topline Securities, in its report, commented that the KSE-100 index exhibited a trading range of 1,437 points, reaching the intra-day high of 63,075 and low of 61,638.
Read PSX plummets over 900 points as political uncertainty sparks panic selling
“As a result, Colgate-Palmolive, Meezan Bank, Engro Corporation, Oil and Gas Development Company and Mari Petroleum collectively had a negative impact, contributing to a decline of 350 points in the index,” Topline said, adding that throughout the trading session, 436 million shares changed hands, which were valued at Rs15.2 billion.
Arif Habib Limited (AHL), in its commentary, noted that price action remained weak with only 15 stocks rising and 77 falling.
“Colgate-Palmolive (-7.03%), Meezan Bank (-3.48%) and Engro Corporation (-2.87%) were the biggest drags on the index while MCB Bank (+1.45%), Hub Power (+0.5%) and Rafhan Maize Products (+4.55%) were the largest upside contributors,” it said.
JS Global analyst Muhammad Shuja Qureshi said that relentless selling pushed the KSE-100 index below the 62,000 mark.
“News on the political front further dented the prevailing negative sentiment,” he said. “Investors are advised to wait for dips to accumulate value stocks,” the analyst added.
Overall trading volumes increased to 436.1 million shares against Monday’s tally of 317.6 million. The value of shares traded during the day was Rs15.3 billion.
Shares of 346 companies were traded. Of these, 76 stocks closed higher, 249 dropped and 21 remained unchanged.
K-Electric was the volume leader with trading in 52.9 million shares, losing Rs0.2 to close at Rs4.65. It was followed by WorldCall Telecom with 29.2 million shares, losing Rs0.02 to close at Rs1.23 and Hascol Petroleum with 24.7 million shares, gaining Rs0.15 to close at Rs7.91.
Foreign investors were net sellers of shares worth Rs666.4 million, according to the NCCPL.
Published in The Express Tribune, January 31st, 2024.
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