PSX continues downturn amid uncertainty

KARACHI:

Continuing its downward trajectory, Pakistan Stock Exchange (PSX) fell over 100 points on Tuesday in a range-bound session, marked by growing political uncertainty and economic concerns.

Although trading started on a positive note, the KSE-100 index quickly plummeted to the intra-day low of 77,817.32 points.

Scores of factors drove the market's decline including doubts about the proposed closure of independent power plants (IPPs), potential reduction in the Public Sector Development Programme (PSDP), geopolitical uncertainties, a weak rupee and a significant 36% month-on-month (MoM) drop in auto sales.

Stocks in power, fertiliser and auto sectors impacted sentiment in the declining market. Despite that, value hunters managed to recoup some of the losses, triggering a partial rebound by the end of the session. The market closed below the 78,000 mark with modest losses.

"Stocks closed lower amid political noise," stated Ahsan Mehanti, MD of Arif Habib Corp. "Uncertainty over the proposed closure of IPPs and cut in the PSDP, geopolitical tensions, weak rupee and dismal data for auto sales, which fell 36% MoM in July, 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 102.87 points, or 0.13%, and settled at 77,877.42.

Topline Securities, in its report, noted that Pakistan equities had a mixed day where bullish and bearish forces fought the whole day to grab reins of market momentum.

"The day started on a positive note. However, investors chose to do some profit-taking, which took the benchmark index into the negative territory, where it reached the intra-day low at 77,817 (-163 points)," it said. "Nonetheless, value hunters rescued the market at the day's low, which helped the index gain 60 points."

Power, fertiliser and auto-sector stocks contributed negatively as Hub Power, Fauji Fertiliser, Millat Tractors, Thal Limited and Engro Fertilisers lost 157 points.

On the other hand, some stocks like Mari Petroleum, Lucky Cement and Javedan Corporation experienced buying interest, resulting in a positive contribution of 147 points, Topline added.

Arif Habib Limited (AHL), in its report, said there was a "flat session that headed into the Independence Day holiday."

Some 41 shares rose while 56 fell with Mari Petroleum (+3.95%), Lucky Cement (+0.91%) and Javedan Corp (+9.99%) being the biggest contributors to the index gains, it said, adding that Hub Power (-1.29%), Fauji Fertiliser (-0.91%) and Millat Tractors (-1.53%) were the largest drags.

JS Global analyst Mohammed Waqar Iqbal stated that range-bound activity continued at the PSX where investors were mainly on sidelines awaiting positive impetus.

"Moving forward, developments on the political front, news regarding approval of the IMF programme and updates on the restructuring of Chinese loans have the potential to drive the market. Therefore, investors are advised to adopt a cautious stance," the analyst added.

Overall trading volumes increased to 604.1 million shares compared with Monday's tally of 415.2 million. The value of shares traded during the day was Rs19.98 billion.

Shares of 443 companies were traded. Of these, 183 stocks closed higher, 211 fell and 49 remained unchanged.

Kohinoor Spinning was the volume leader with trading in 131.9 million shares, gaining Rs0.68 to close at Rs8.32. It was followed by Yousuf Weaving Mills with 89.2 million shares, gaining Rs0.29 to close at Rs5.63 and Hascol Petroleum with 47.8 million shares, gaining Rs0.27 to close at Rs6.79.

Foreign investors were net buyers of shares worth Rs62.01 million, according to the NCCPL.