Pakistan Stock Exchange (PSX) on Tuesday faced pressure from economic headwinds and lost over 200 points as dismal data indicating a significant 19% year-on-year (YoY) decline in cement sales and an 8% decrease in oil consumption left investors worried about the future course of the economy.
In the morning, the trading session commenced on a strong note, building upon the gains recorded in the prior session. Maintaining the momentum, the KSE-100 index breached the 66,000-point mark and reached its intra-day high at 66,134.84 before midday.
However, the optimism proved short-lived as speculation surrounding the new conditions to be imposed by the International Monetary Fund (IMF) pertaining to economic reforms and bridging the tax gap undermined investors’ interest.
Oil and gas companies mainly contributed to the market’s decline. The index erased all prior gains, plunging to the intra-day low at 65,500.06.
Though the bourse recovered somewhat, it closed the day with modest losses owing to the lack of major positive triggers.
“Stocks closed under pressure amid dismal data of cement sales that fell 19% YoY while oil sales decreased 8% YoY in February 2024,” said Arif Habib Corp MD Ahsan Mehanti.
“Speculations about new IMF loan conditions for economic reforms and plugging the tax gap, and PM’s nod for talks for a long-term IMF bailout played the role of catalysts in bearish close at the PSX.”
At close, the benchmark KSE-100 index recorded a decrease of 225.68 points, or 0.34%, and settled at 65,726.04.
Topline Securities, in its report, said that Pakistan’s stock index concluded the trading day at 65,726, with a decline of 226 points. “Throughout the session, the index demonstrated a mixed trajectory, reaching the high of 66,135 and low of 65,500,” it said.
The downturn was primarily driven by Oil and Gas Development Company, Pakistan Petroleum, Mari Petroleum, Pakistan State Oil and Millat Tractors, which collectively contributed 228 points to the market’s decline.
Conversely, Dawood Hercules Corporation, Attock Refinery and TRG Pakistan added 96 points, Topline added.
Arif Habib Limited (AHL) reported that 63 shares rose while 33 fell in the KSE-100 index. Dawood Hercules (+4.24%), Attock Refinery (+4.69%) and TRG Pakistan (+2.43%) were the biggest contributors to the index’s gains.
“Near-term support remains at 65,000-65,500, which should halt declines allowing the index to trade through 67,000,” AHL added.
JS Global analyst Mubashir Anis Naviwala said that profit-taking continued across the board as the KSE-100 closed at 65,726, losing 226 points.
“Going forward, we expect range-bound activity and recommend investors to view any downtrend as an opportunity to buy stocks in banking and exploration and production (E&P) sectors,” the analyst added.
Overall trading volumes decreased to 396.6 million shares against Monday’s tally of 472.9 million. The value of shares traded during the day was Rs16.6 billion.
Shares of 352 companies were traded. Of these, 134 stocks closed higher, 204 dropped and 14 remained unchanged.
Kohinoor Spinning Mills was the volume leader with trading in 39.7 million shares, losing Rs0.18 to close at Rs5.50. It was followed by Pakistan Refinery with 34.05 million shares, gaining Rs0.79 to close at Rs28.96 and Pakistan Telecommunication Company with 24.9 million shares, gaining Rs0.14 to close at Rs12.22.
Foreign investors were net buyers of shares worth Rs15.96 million, according to the NCCPL.
Published in The Express Tribune, March 6th, 2024.
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