PSX dives due to profit-taking

Index plummets 3,790 points amid slump in global equities, foreign outflows

KARACHI:

Pakistan Stock Exchange (PSX) on Wednesday suffered a massive crash as it plummeted 3,790 points, marking one of the biggest single-day drops in history.

The deep plunge sent shockwaves through the market, where extensive selling across key sectors triggered a sharp reversal of confidence. After briefly breaching the 116,000 mark earlier in the day, the KSE-100 index came under mounting pressure in the face of concerns over stock overvaluation, currency depreciation and economic uncertainty.

Market experts believe that a significant drop in global equities and discussions between the government and the International Monetary Fund (IMF) about taxes and structural reforms dampened investor sentiment. The bourse saw a highly volatile session with the index fluctuating between the intra-day high of 116,236.70 and the intra-day low of 110,896.27.

In its largest single-day decline on record, the KSE-100 index plummeted amid widespread sell-off, where fertiliser, oil and gas, and banking sectors were the primary contributors, commented Ahmed Sheraz, a trader at KTrade Securities.

By the end of trading, the benchmark KSE-100 index recorded a slump of 3,790.40 points, or 3.30%, and settled at 111,070.29. Arif Habib Corp MD Ahsan Mehanti wrote, "Stocks closed highly bearish amid a slump in global equities and foreign outflows."

Weaker rupee, political noise and concerns over the unmet IMF targets for taxes and reforms under the $7 billion Extended Fund Facility were the major catalysts for the bearish activity, he added. Topline Securities wrote in its commentary that the benchmark index registered a substantial decline, concluding the session at 111,070, down 3,790 points, or 3.30%.

Local mutual funds, having been net buyers for the past 14 consecutive trading sessions, turned net sellers on Tuesday. Market sentiment suggested that they continued to sell equities on Wednesday as well, it said.

Primary drivers of the downward movement were Mari Petroleum, Fauji Fertiliser Company, Hub Power, Pakistan Petroleum and Meezan Bank, which collectively accounted for a plunge of 1,731 points in the index.

Trading activity remained robust as the total volume stood at 1.11 billion shares and the traded value reached Rs60 billion, Topline added.

Arif Habib Limited (AHL) observed in its report that the market experienced a "follow-through downtrend", during which the KSE-100 index breached the 112,500 mark after trading at levels as high as 116,200, resulting in a -4.4% intra-day swing.

On the KSE-100, only nine shares advanced while 91 dropped. Mari Petroleum (-10%), Fauji Fertiliser (-5.76%) and Hub Power (-5.64%) were the biggest contributors to the index's decline.

On the other side, upside contributors were Pakistan State Oil (+5.13%), Indus Motor (+2.17%) and Pak Elektron (+0.97%), it said.

Shares of Attock Cement (+10%) jumped following news that Pharaon Investment Lebanon intended to re-evaluate its long-term strategic options, including a potential sale of investment in its Pakistan cement business, AHL added.

JS Global analyst Muhammad Hasan Ather wrote that the KSE-100 recorded a significant decline, losing 3.3% and closing at 111,070, after briefly reaching the intra-day high of 116,237.

The decline was mainly attributable to the profit-taking activities observed in key sectors including automobile assemblers, cement, commercial banks, oil and gas exploration, and refineries, he said. WorldCall Telecom, Cnergyico PK, The Bank of Punjab, Pakistan Refinery and Pak Elektron were the leading volume drivers for the day.

The analyst pointed out that the bearish activity was driven by the revenue collection shortfall, weak global crude oil prices and unresolved IMF programme-related issues.

He anticipated that despite the sharp fall, the market's resilience and positive long-term fundamentals would continue to portray a promising outlook for investors.

Overall trading volumes decreased to 1.11 billion shares compared to Tuesday's tally of 1.25 billion.

Shares of 472 companies were traded. Of these, 89 stocks closed higher, 349 fell and 34 remained unchanged.

WorldCall Telecom was the volume leader with trading in 139.3 million shares, losing Rs0.17 to close at Rs1.71. It was followed by Cnergyico PK with trading in 67.5 million shares, losing Rs0.54 to close at Rs6.54 and The Bank of Punjab with 60.2 million shares, gaining Rs0.11 to close at Rs10.17.

During the day, foreign investors bought shares worth Rs69.1 million, the National Clearing Company of Pakistan Limited (NCCPL) reported.