Pakistan Stock Exchange (PSX) suffered significant losses on Friday, fueled primarily by widespread concerns over economic and political uncertainties, with investors remaining cautious ahead of the upcoming monetary policy meeting on July 29.
The trading day began on a positive note and soon the KSE-100 index reached its intra-day high of 78,569.88 points. However, the momentum quickly reversed as the market began to decline. Just before midday, it dived below the 78,000 mark and hit the intra-day low of 77,921.47 points.
Several factors contributed to the bearish trend, including the weak global equities, declining foreign exchange reserves of Pakistan, uncertainty surrounding the re-profiling of Chinese energy debt and ongoing political noise amid rising taxes and electricity bills. These issues exacerbated investor apprehensions, leading to the market’s downturn.
Despite attempts to revive investor interest, the KSE-100 closed the day with a sharp decline. However, it managed to stay above the 78,000 mark.
“Stocks closed lower amid investor worries about the economic and political uncertainty,” commented Ahsan Mehanti, MD of Arif Habib Corp.
“Weak global equities, falling forex reserves, uncertainty about the terms of re-profiling Chinese energy debt and ongoing political noise amid surge in taxes and power bills played the role of catalysts in bearish close at the PSX.”
At the end of trading, the benchmark KSE-100 index recorded a decline of 439.82 points, or 0.56%, and settled at 78,029.51.
Topline Securities, in its report, said a “range-bound session was observed as investors preferred to remain on sidelines before the monetary policy meeting on Monday (July 29).”
Major positive contribution to the index came from Bank AL Habib, Bank Alfalah, United Bank, Hub Power and Pakistan Tobacco as they cumulatively contributed 216 points.
On the other hand, Habib Bank, Oil and Gas Development Company, Meezan Bank, Pakistan State Oil and Systems Limited lost ground, weighing down the index by 258 points, Topline added.
Arif Habib Limited (AHL), in its report, stated that the PSX saw a “second consecutive week-on-week decline with the KSE-100 losing 2.35% on the week. The index has now arrived into the weekly support range of 77,500-78,000 from where a reversal can emerge.”
Some 24 shares rose and 71 fell with Bank AL Habib (+1.75%), United Bank (+1.02%) and Bank Alfalah (+2.38%) being the biggest contributors to the index gains, AHL said, adding that the largest drags were Habib Bank (-2.02%), Oil and Gas Development Company (-1.72%) and Meezan Bank (-1.3%).
JS Global analyst Mubashir Anis Naviwala noted that a dull activity was observed at the PSX
on the last trading day of the week where investors preferred to stay on sidelines in the absence of major triggers.
“Investors are advised to view this dip as an opportunity to take positions in cement, steel, fertiliser and tech stocks,” the analyst added.
Overall trading volumes decreased to 278.3 million shares compared with Thursday’s tally of 327.3 million. The value of shares traded during the day was Rs11.6 billion.
Shares of 429 companies were traded. Of these, 114 stocks closed higher, 255 fell and 60 remained unchanged.
K-Electric was the volume leader with trading in 15.2 million shares, losing Rs0.08 to close at Rs4.27. It was followed by Sui Northern Gas Pipelines with 14.8 million shares, losing Rs2.63 to close at Rs69.98 and WorldCall Telecom with 14.2 million shares, losing Rs0.02 to close at Rs1.16.
Foreign investors were net buyers of shares worth Rs172.04 million, according to the NCCPL.
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