Pakistan Stock Exchange (PSX), despite crossing the 75,500 mark, succumbed to late profit-taking and closed lower by 250 points on Wednesday, driven primarily by uncertainty about austerity measures in the upcoming budget.
The market opened on a positive note and touched its intra-day high at 75,513.89 points before midday but it could not sustain gains in the second half. Factors such as a double-digit inflation and weak rupee dragged the KSE-100 index into the red.
Investors were wary of government’s talks with the International Monetary Fund (IMF) for a new loan programme as they saw an expansion of the austerity drive in the next fiscal year’s budget.
Furthermore, negative sentiment persisted over the outstanding dues payable to China under CPEC projects.
Late-session profit-taking trimmed the gains and took the index to its intra-day low of 74,835.48 points in the absence of major positive triggers. The KSE-100 closed the day below the 75,000 mark.
“Stocks closed bearish on a weak economic outlook,” said Ahsan Mehanti, MD of Arif Habib Corp.
“The National Accounts Committee’s approval of a subdued growth of 2.4% amid 26% inflation in FY24, fall in Roshan Digital Account (RDA) inflows in April, weakening rupee and uncertainty about the outcome of negotiations on CPEC dues played the role of catalysts in bearish close at the PSX.”
At the end of trading, the benchmark KSE-100 index recorded a decrease of 250.10 points, or 0.33%, and settled at 74,956.67.
Topline Securities, in its report, declared Wednesday “a muddled day” where the KSE-100 index hovered around the 75,000 psychological level almost throughout the session but in the last hour an inexplicable selling spree threw the index below the 75k zone. “This market behaviour can be attributed to the absence of positive triggers, which can assist in maintaining its north-bound journey,” the report said.
“Vibes from negotiations between the government and the IMF and anticipation of further austerity measures in the upcoming budget kept investors at bay as they opted for some profit-taking above 75,000.”
Arif Habib Limited (AHL), in its review, mentioned that the PSX saw an additional consolidation around the 75,000 level.
“It appears that benchmarks are getting heavy here and a downside price action is likely to emerge in the coming weeks; 74,000 points remain the near-term support,” AHL added.
Overall trading volumes increased to 584.5 million shares against Tuesday’s tally of 462.3 million. The value of shares traded during the day was Rs17.7 billion.
Shares of 393 companies were traded. Of these, 132 stocks closed higher, 236 dropped and 25 remained unchanged.
Hum Network was the volume leader with trading in 71.3 million shares, gaining Rs0.13 to close at Rs12.03. It was followed by Pace (Pakistan) with 46.6 million shares, gaining Rs1 to close at Rs4.32 and K-Electric with 34.5 million shares, losing Rs0.13 to close at Rs4.71.
Foreign investors were net buyers of shares worth Rs123.2 million, according to the NCCPL.
Published in The Express Tribune, May 23rd, 2024.
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