PSX retreats as political noise rises

Benchmark KSE-100 index dips 86.83 points, settles at 63,219.10

KARACHI:

Pakistan Stock Exchange (PSX) on Tuesday came under selling pressure, sparked by political uncertainty owing to delay in calling the first National Assembly (NA) session after general elections in early February.

In the morning, trading commenced on a strong note on top of previous day’s gains. The market then took a dive but recovered swiftly and the KSE-100 index reached its intra-day high at 63,622 points at midday.

However, as the day progressed, the market began its downward spiral due to political noise and economic concerns, which caused a shift in investor sentiment.

Notably, worries over the International Monetary Fund’s (IMF) conditions under a fresh loan programme, high inflation and a hike in gas prices contributed to the bearish sentiment. Consequently, the index touched the intra-day low at 63,055.64 points in the afternoon, erasing all the earlier gains.

The market was unable to regain the momentum in the absence of major positive triggers. Nevertheless, the index managed to close above the 63,000 mark with slight losses. “Stocks closed under pressure amid political uncertainty following president’s refusal to call the NA session,” said Arif Habib Corp MD Ahsan Mehanti.

“Uncertainty about the IMF’s conditions for the proposed new loan, concerns over high inflation and hike in gas prices for industrial consumers played the role of catalysts in bearish close of the market.” At close, the benchmark KSE-100 index recorded losses of 86.83 points, or 0.14%, and settled at 63,219.10.

Topline Securities observed in its report that the stock market wrapped up the trading day at 63,219 with a dip of 87 points. “Throughout the session, the index experienced a mixed pattern, hitting a high of 63,622 and low of 63,055,” it said.

The decline in the index was influenced by Oil and Gas Development Company (OGDC), Service Industries, United Bank, Pakistan Petroleum and Pakistan State Oil, which collectively lost 207 points, Topline added. Arif Habib Limited (AHL) remarked that the “63k-64k congestion zone was held firm with intra-day gains limited to 63,622”.

Read PSX soars as political gridlock breaks

TRG Pakistan (+5.03%), Mari Petroleum (+1.99%) and Kot Addu Power Company (+7.5%) were the biggest contributors to the gains, it said, adding that tech names remained a hot bet but the market needed to clear the 64,000 mark to indicate broader participation.

During the day, OGDC (-3.15%) announced 1HFY24 earnings per share of Rs28.67, up 30% year-on-year, and 2QFY24 earnings per share of Rs17.27, up 78% year-on-year, the highest on record, AHL said.

JS Global analyst Mohammed Waqar Iqbal said technically the market reached the resistance level of 63,200 while major results had already been announced.

“Profit-taking has been witnessed in the market. Going forward, profit realisation is recommended and investors are advised to sell on strength,” the analyst added.

Overall trading volumes decreased to 409.96 million shares against Monday’s tally of 452.9 million. The value of shares traded during the day was Rs14.7 billion.

Shares of 355 companies were traded. Of these, 111 stocks closed higher, 223 dropped and 21 remained unchanged.

The Bank of Punjab was the volume leader with trading in 47.6 million shares, gaining Rs0.02 to close at Rs6.27. It was followed by K-Electric with 40.6 million shares, gaining Rs0.08 to close at Rs4.52 and WorldCall Telecom with 25.8 million shares, losing Rs0.04 to close at Rs1.27.

Foreign investors were net buyers of shares worth Rs198.9 million, according to the NCCPL.

Published in The Express Tribune, February 28^th, 2024.

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