Stocks fall as economic uncertainty prevails

KSE-100 index drops 589.30 points, settles at 77,980.29


Our Correspondent August 13, 2024
A sign of the Pakistan Stock Exchange is seen on its building in Karachi, Pakistan January 11, 2016. PHOTO: REUTERS

print-news
KARACHI:

With the commencement of the new week, Pakistan Stock Exchange (PSX) saw a significant downturn on Monday as the KSE-100 index dived nearly 600 points in a selling spree driven by a poor economic outlook.

In the morning, trading began on a robust note, with the KSE-100 reaching its intra-day high of 78,886.46 points. However, the initial momentum proved short-lived as selling pressure grew in the latter half.

The downtrend was fueled by a number of factors including the rupee weakness and political uncertainty. Additionally, the delay in privatising state-owned enterprises (SOEs) and concerns over the unsettled debt of Chinese independent power producers (IPPs) further pulled the market down.

Consequently, the index fell below the 78,000 mark, hitting its intra-day low of 77,940.52 points in the final trading hour. It ended trading near the day's low with substantial losses.

"Stocks fell sharply on a weak economic outlook," stated Ahsan Mehanti, MD of Arif Habib Corp. "Rupee instability, political uncertainty, the delay in privatisation of SOEs and concerns over the unsettled Chinese IPPs' debt played the role of catalysts in bearish close at the PSX."

At the end of trading, the benchmark KSE-100 index recorded a notable decline of 589.30 points, or 0.75%, and settled at 77,980.29.

Topline Securities, in its report, noted that the KSE-100 began the day on a positive note with the intra-day high of 316 points. However, selling pressure emerged in the second half.

Mari Petroleum (+3.88%) was the standout performer of the day, continuing its upward momentum after hitting two consecutive upper caps in the previous sessions following the company's announcement of an 800% bonus, it said.

Mari Petroleum, Hub Power, Service Industries, Pakistan Oilfields and MCB Bank collectively contributed 259 points to the index. Conversely, profit-taking in Meezan Bank, Systems Limited and Lucky Cement resulted in a loss of 176 points, Topline added.

Arif Habib Limited (AHL), in its report, said "Monday's decline re-tests 78,000 from where the upside is expected to resume."

Some 22 shares rose while 77 fell with Mari Petroleum (+3.88%), Hub Power (+1.56%) and Service Industries (+5.33%) being the biggest contributors to the index gains while Meezan Bank (-1.81%), Systems Limited (-2.46%) and Lucky Cement (-2.14%) were the largest drags, AHL added.

JS Global analyst Mohammed Waqar Iqbal stated that the stock market exhibited volatile activity on Monday.

"Buying interest was primarily seen in technology and oil stocks, but profit-taking emerged at higher levels as investors opted to secure gains in the absence of near-term catalysts, particularly with the corporate earnings season nearing its end," the analyst said.

Overall trading volumes decreased to 415.2 million shares compared with Friday's tally of 420.4 million. The value of shares traded during the day was Rs22.2 billion.

Shares of 444 companies were traded. Of these, 122 stocks closed higher, 278 fell and 44 remained unchanged.

Yousuf Weaving Mills was the volume leader with trading in 38.1 million shares, gaining Re1 to close at Rs5.34. It was followed by WorldCall Telecom with 19.2 million shares, remaining unchanged at Rs1.17 and Kohinoor Spinning with 13.3 million shares, gaining Re1 to close at Rs7.64.

Foreign investors were net buyers of shares worth Rs238 million, according to the NCCPL.

COMMENTS

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ