PSX plunges over global equity sell-off

KARACHI:

Pakistan Stock Exchange (PSX) on Monday plunged more than 1,100 points in a widespread bearish activity, sparked by the global equity sell-off over fears of a potential US recession and escalating tensions in the Middle East.

The KSE-100 index started off the day positively, reaching its intra-day high of 78,330.09 points very soon. However, it struggled to sustain the momentum and started descending before midday.

Key factors contributing to the bearish trend included the weak rupee, slump in global crude oil prices and potential impact on Pakistan's exports due to recession fears in the US. The downturn was driven by the decline in stocks in power, exploration and production (E&P), IT and banking sectors.

Consequently, the market fell below the 78,000 mark to its intra-day low of 76,943.24 points. Despite closing above 77,000, the index recorded hefty losses for the day.

"Stocks fell across the board on global equity sell-off amid fears of US recession and concerns over tensions in the Middle East," stated Ahsan Mehanti, MD of Arif Habib Corp.

"Weak rupee, slump in global crude oil prices and concerns over the likely impact on exports of the US recession fears played the role of catalysts in bearish close at the PSX."

At the end of trading, the benchmark KSE-100 index registered a slump of 1,141.50 points, or 1.46%, and settled at 77,084.49.

Topline Securities, in its report, commented "Pakistan's stock market followed the global downtrend, with the KSE-100 index plunging 1,141 points, or 1.46%, to settle at 77,084."

During the session, the KSE-100 index fluctuated between a high of 78,330 and low of 76,943 points, it said.

The downturn was largely influenced by declines in power, E&P, IT and banking sectors, with key contributors being Hub Power, Habib Bank, Pakistan Oilfields, Systems Limited and Bank AL Habib, which accounted for a combined drop of 484 points, Topline added.

Arif Habib Limited (AHL), in its report, remarked that there were "big red candles across the globe on Monday, though Pakistan held up better than the rest of the region where Japan's Nikkei hit its circuit breaker at -12%."

Some 15 stocks rose while 82 fell on the KSE-100 index with Hub Power (-4.22%), Habib Bank (-3.16%) and Pakistan Oilfields (-3.16) being the biggest downside contributors, AHL said, adding that until the 78,000-point level was regained, pressure to the downside would persist.

JS Global analyst Mohammed Waqar Iqbal said that the stock market started trading on a positive note, but bulls could not sustain the momentum for long as investors opted to book profits amid a lack of near-term triggers.

"Moving forward, we advise investors to adopt a wait-and-see approach. Further downside is possible with any major negative developments in the global political scenario, so caution is recommended," the analyst added.

Overall trading volumes increased to 501.2 million shares compared with Friday's tally of 443.5 million. The value of shares traded during the day was Rs21.06 billion.

Shares of 442 companies were traded. Of these, 129 stocks closed higher, 261 fell and 52 remained unchanged.

Kohinoor Spinning Mills was the volume leader with trading in 86.04 million shares, gaining Re1 to close at Rs5.41. It was followed by Yousuf Weaving Mills with 32.8 million shares, gaining Re1 to close at Rs4.14 and WorldCall Telecom with 19.6 million shares, losing Rs0.05 to close at Rs1.21.

Foreign investors were net sellers of shares worth Rs93.8 million, according to the National Clearing Company of Pakistan Limited (NCCPL).