PSX closes lower amid volatility

KSE-100 index drops 1,309 points, settles at 114,861

KARACHI:

Pakistan Stock Exchange (PSX) on Tuesday witnessed a bearish session, with the benchmark KSE-100 index experiencing significant swings, reaching the intra-day high of 869 points before plunging to the intra-day low of 2,480 points.

By the close of trading, the index settled at 114,860.69, marking a decline of 1,308.72 points, or 1.13%. The downturn was attributed to a combination of factors including cautious expectations surrounding the State Bank of Pakistan's (SBP) monetary policy easing amid multiple risks.

Analysts noted that concerns over a shortfall in the government's tax collection, weak global crude oil prices and unresolved issues pertaining to the IMF targets contributed to the bearish activity. Despite an initial rally following the SBP's 200-basis-point (bps) rate cut, the market saw significant volatility, where profit-taking in the latter half exacerbated the decline. According to Ahsan Mehanti of Arif Habib Corp, stocks closed bearish amid cautious SBP policy easing on multiple risks as well as static core inflation near 9.7%, and dismal growth data over the last six months.

He added that consolidation, coupled with concerns over the government's tax collection shortfall, weak global crude oil prices and unresolved slippages in IMF targets, played the role of catalyst in the bearish activity.

Topline Securities commented in its review that the market witnessed extreme volatility throughout the day as investors digested the monetary policy committee's (MPC) latest decision. The SBP announced its fifth consecutive rate cut, reducing the policy rate by 200 bps to 13%.

The benchmark index experienced significant swings, reaching the intra-day high of 869 points before plunging to the intra-day low of 2,480 points. By the close of trading, the index settled at 114,861, marking a decline of 1,309 points, it said.

Topline pointed out that profit-taking gained momentum in the latter half of the session, amplifying volatility and further pushing the market downward.

The downward trajectory was primarily driven by Mari Petroleum, Fauji Fertiliser Company, Lucky Cement, Oil and Gas Development Company and Pakistan Petroleum Ltd, which contributed 1,696 points to the index's decline, it added.

Arif Habib Limited (AHL) stated in its report that the PSX witnessed a rare downtrend following a 200bps cut in rate in the monetary policy committee meeting.

Some 31 shares rose while 69 fell, with Hub Power (+8.23%), UBL (+4.53%) and MCB Bank (+4.44%) contributing the most to the index gains. Mari Petroleum (-10%), Fauji Fertiliser Company (-5.11%) and Oil and Gas Development Company (-4.56%) were the biggest index drags, AHL noted.

The current account registered a surplus of $729 million for November 2024, the highest since February 2015, bringing the 5MFY25 surplus to $944 million.

AHL commented that currently there had only been a one-day break in the momentum, but if the KSE-100 index broke the 112,500 mark, the outlook would change. However, "holding above 112,500 points keeps the index looking higher," it remarked.

Overall, trading volumes increased to 1.25 billion shares compared to Monday's tally of 1.47 billion.

Shares of 470 companies were traded. Of these, 134 stocks closed higher, 297 fell and 39 remained unchanged.

WorldCall Telecom was the volume leader, with trading in 151.9 million shares, falling Rs0.04 to close at Rs1.88. It was followed by Pak Electron, with trading in 107.5 million shares, gaining Rs2.99 to close at Rs38.11 and Cnergyico PK, with 58.3 million shares, falling Rs0.04 to close at Rs7.08. During the day, foreign investors sold shares worth Rs506.7 million.