Political worries, global equity slump hit PSX

KARACHI:

Pakistan Stock Exchange (PSX) on Monday faced a downward trajectory amid volatile trading as the KSE-100 index dipped over 280 points, following a broad slump in global equities and political instability worries.

In the morning, the index kicked off trading on a promising note, reaching its intra-day high of 79,214.27 points. However, the early optimism quickly vanished when the bourse reversed course and fell sharply.

The downward streak was triggered by uncertainty about the International Monetary Fund's (IMF) approval of Pakistan's Rs2.8 trillion funding plan to address the circular debt crisis.

Additionally, investor caution ahead of the potential policy rate reduction by the State Bank of Pakistan (SBP) later in the week exacerbated the bearish activity.

Following continuous fluctuations, the KSE-100 took a deep dive later in the day, when it hit the intra-day low of 78,545.68 points towards the close of trading. The market settled near the day's low with modest losses.

"Stocks closed lower amid a slump in global equities and concerns over political noise," said Ahsan Mehanti, MD of Arif Habib Corp. "Uncertainty over IMF's approval of a Rs2.8 trillion funding plan to resolve the circular debt crisis and expectations of a cautious SBP monetary policy stance this week played the role of catalysts in bearish close at the PSX."

At close, the benchmark KSE-100 index posted a decline of 282.72 points, or 0.36%, and settled at 78,615.

Topline Securities, in its review, said that Pakistan's stock market fell 283 points, or 0.36%, and ended the day at 78,615. "Throughout the trading session, the index saw considerable volatility, peaking at 79,214 and dipping to 78,546," it said.

The decline was largely attributed to Millat Tractors, Hub Power, United Bank, Habib Bank and Meezan Bank, which together accounted for a decline of 354 points, Topline added.

Arif Habib Limited (AHL), in its report, wrote that there was another push back from above 79,000 points following intra-day gains, when the market reached 79,200.

On the KSE-100 index, 42 shares rose while 53 fell with Fauji Fertiliser (+1.41%), Lucky Cement (+1.29%) and Pioneer Cement (+4.8%) being the biggest contributors to the index gains, it said.

Millat Tractors (-6.55%) was the largest drag following announcement of FY24 earnings per share of Rs51.7, up 194% year-on-year. "Despite record net sales, the merger of Millat Tractors with Millat Equipment is pending approval from the Lahore High Court, during which Millat Tractors cannot pay further dividends, which disappointed the market."

JS Global analyst Mubashir Anis Naviwala observed that the stock market opened on a positive note, pushing the KSE-100 to the high of 79,214. However, profit-taking followed and the index eventually settled at 78,615, down 283 points.

"We recommend investors to adopt a buy-on-dips strategy with focus on cement, automobile and technology sectors," the analyst added.

Overall trading volumes decreased to 491.1 million shares compared with Friday's tally of 743.1 million. The value of shares traded during the day was Rs10.1 billion.

Shares of 443 companies were traded. Of these, 155 stocks closed higher, 228 dropped and 60 remained unchanged.

WorldCall Telecom was the volume leader with trading in 86.01 million shares, gaining Rs0.04 to close at Rs1.46. It was followed by Kohinoor Spinning Mills with 42.9 million shares, gaining Rs0.31 to close at Rs9.63 and Pace Pakistan with 37.3 million shares, gaining Rs0.24 to close at Rs6.38. During the trading session, foreign investors sold shares worth Rs499.2 million, according to the NCCPL.