Economic uncertainties trigger profit-taking

ISLAMABAD:

KARACHI

Continuing its downward trajectory, the Pakistan Stock Exchange (PSX) fell by nearly 487 points on Tuesday, driven by institutional investors engaging in profit-taking amid ongoing economic uncertainties, reflecting cautious market sentiment.

The trading day began on a positive note, with the KSE-100 index reaching an intraday high of 78,857.61 points. However, this early momentum quickly faded as the market sharply reversed course.

Key factors driving this downturn include reports of the International Monetary Fund (IMF) board not approving Pakistan's new loan programme, concerns over a depreciating rupee, and escalating industrial power tariffs leading to shutdowns. Additionally, external financing gaps and pending restructuring of dues to Chinese Independent Power Producers (IPPs) further exacerbated the bearish sentiment.

Notable declines were observed across the fertiliser, auto, and power sectors, pushing the index to an intraday low of 78,077.83 points in the final trading hours.

Despite reporting significant losses for the day, the bourse ultimately closed the day above the 78,000 mark.

"Stocks closed under pressure amid institutional profit-taking on economic uncertainty," said Ahsan Mehanti, Managing Director of Arif Habib Corp. "Reports of IMF board meetings omitting approvals for Pakistan's new loan programme, concerns over a falling rupee, surging industrial power tariffs leading to shutdowns, external financing gaps, and pending restructuring of dues to Chinese IPPs played a catalyst role in the bearish close."

At the end of trading, the benchmark KSE-100 index posted a fall of 486.82 points, or 0.62%, and settled at 78,084.23.

Topline Securities, in its report, noted that the Pakistan stock market declined by 487 points, or 0.62%, ending the day at 78,084. "The index displayed notable volatility, reaching a high of 78,858 and a low of 78,077 during the session."

The decline was influenced by movements in the fertiliser, auto, and power sectors, with Fauji Fertiliser, Engro Corporation, Millat Tractors, Hub Power, and Engro Fertilisers contributing to the drop of 281 points, Topline added.

Arif Habib Limited (AHL), in its review, said, "Pushed back to 78,000 as the KSE-100 continues to struggle with higher levels."

"Thirty shares rose while 64 fell, with Mari Petroleum (+1.57%), Pakistan State Oil (+1.24%), and Fauji Cement Company (+2.72%) making the biggest upside contributions," AHL said, adding that Fauji Fertiliser (-1.72%), Engro Corporation (-2.36%), and Millat Tractors (-3.8%) were the biggest index drags.

JS Global analyst Mohammed Waqar Iqbal said that bears dominated the session on Tuesday, driven by profit-taking at higher levels. "Looking ahead, the market is expected to remain in a consolidation phase, with any positive economic developments likely to uplift investor sentiment."

"Investors are advised to capitalise on dips, with a focus on sectors such as oil, gas, technology, automobiles, and fertilisers," the analyst added.

Overall trading volumes increased to 591.5 million shares compared with Monday's tally of 512.3 million. The value of shares traded during the day was Rs17.12 billion.

Shares of 436 companies were traded. Of these, 163 stocks closed higher, 222 fell, and 51 remained unchanged.

Kohinoor Spinning Mills was the volume leader with trading in 74.33 million shares, gaining Rs1.05 to close at Rs11.57. It was followed by WorldCall Telecom with 47.4 million shares, losing Rs0.02 to close at Rs1.26, and Cnergyico PK with 43.9 million shares, gaining Rs0.19 to close at Rs3.98.

Foreign investors were net buyers of shares worth Rs550.14 million, according to the NCCPL.