PSX slips despite strong opening

KSE-100 index adds 4.50 points, settles at 60,464.24

KARACHI:

The Pakistan Stock Exchange (PSX) witnessed some productivity on Tuesday, although it failed to build on Monday’s gains as investors continued grappling with uncertainty over the political scenario.

The trading session began positively, reaching an intraday high of 61,237.51 points before midday. However, the KSE-100 index couldn’t sustain this momentum as investors struggled with warnings from Fitch regarding potential upheavals on the International Monetary Fund (IMF) programme and dismal data on the current account deficit, which stood at $269 million in January 2024. Consequently, the index slipped below the 61,000 mark and eventually touched an intraday low of 60,420.83 points in its final trading hours.

Despite this, Barclays remained optimistic, stating that Pakistan is unlikely to default on Eurobonds and praised the Sharif-led government for playing a less disruptive role. This aided the index to close on a positive note with some gains.

Notably, in the pharmaceutical sector, stocks surged following news of deregulation on non-essential medication prices. “Stocks closed flat as investors weigh Fitch warnings over upheavals on IMF programme on political uncertainty and dismal data on the current account deficit at $269 million in January 2024,” said Arif Habib Corp MD Ahsan Mehanti.

“Barclays overweight on Pakistan unlikely to opt default on Eurobonds and asserts Sharif-led government less disruptive played catalyst role in positive close.”

At the close, the benchmark KSE-100 index recorded gains of 4.50 points, or 0.01%, settling at 60,464.24.

Topline Securities noted in its report that the KSE-100 index opened positively, reaching an intraday high of 777.77 points. However, the index couldn’t sustain the positivity, closing at 60,464.24 (+4.50 points).

“The market sentiment soured amidst enduring political gridlock hampering the formation of the federal government and a dearth of favourable catalysts.”

Read PSX rebounds on political stability optimism

“In the pharmaceutical domain, a surge ensued following news of the ministry’s green light for deregulating the prices of non-essential medications,” it said. Arif Habib Limited (AHL) observed in its report that the inability to build on Monday’s gains saw the KSE-100 contained with HoD coming in at 61,237, well below 62,000 near term resistance.

“49 stocks rose and 42 fell with Hub Power Company (+1.99%), Systems Limited (+2.28%), and Pakistan State Oil (+3.65%) the biggest contributors to index gains while Oil and Gas Development Company (-2.18%), Pakistan Petroleum (-2.06%), and Mari Petroleum Company (-2.03%) the largest downside contributors,” AHL added.

JS Global analyst Mohammed Waqar Iqbal noted that the positive news flow on the political front regarding a resolution to form a government lifted the market. “Going forward, we recommend investors to avail any downside as an opportunity to buy in the banking and exploration and production (E&P) sectors,” the analyst added.

Overall trading volumes increased to 364.4 million shares against Monday’s tally of 261.8 million. The value of shares traded during the day was Rs10.9 billion.

Shares of 349 companies were traded, with 174 stocks closing higher, 155 dropping, and 20 remaining unchanged. Bank of Punjab led in volume with trading in 117.02 million shares, gaining Rs0.25 to close at Rs6.27. It was followed by Pakistan International Airlines Corp with 19.3 million shares, gaining Rs0.04 to close at Rs11.10, and K-Electric with 19.2 million shares, losing Rs0.04 to close at Rs4.26.

Foreign investors were net sellers of shares worth Rs127.9 million, according to NCPL.

Published in The Express Tribune, February 21^st, 2024.

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