PM visit fails to keep bourse positive

KARACHI:

Intense selling pressure gripped Pakistan Stock Exchange (PSX) on Wednesday as the benchmark KSE-100 index dived around 1,900 points, driven by profit-booking at higher valuations.

Prime Minister Shehbaz Sharif visited the PSX, which gave initial boost to the stock exchange. However, he did not announce any immediate relief measures, putting a dent on investor confidence.

Although trading started on a strong note, with the index hitting the intra-day high of 117,750.23 points in the first half, uncertainty erased the earlier gain of nearly 1,700 points later in the day.

Extensive selling pressure was particularly noted across sectors such as banking, and exploration and production, which pushed the index to the intra-day low of 113,847.04 towards the close of trading.

Arif Habib Corp MD Ahsan Mehanti remarked that panic selling was observed after the prime minister's visit to the PSX as it failed to provide immediate relief to investors. "Mid-session support was seen following the PM's affirmation of macroeconomic stability and improving economic indicators," he said.

However, rupee instability, political tensions and uncertainty surrounding the outcome of slippage in the IMF's structural benchmarks acted as catalysts for bearish close at the PSX, Mehanti added.

At the end of trading, the benchmark KSE-100 index recorded a sharp decrease of 1,904.23 points, or 1.64%, and settled at 114,148.46.

Topline Securities, in its report, commented that the bourse started the day with positive sentiment as investor enthusiasm was fuelled by the prime minister's visit to the PSX. The optimism led the index to the intra-day high of 1,697 points.

However, profit-booking dominated the latter half of the session, pulling the index down to the intra-day low of 2,205 points. Ultimately, the market closed at 114,148, down 1,904 points, Topline said.

Arif Habib Limited (AHL) reported that after a promising start, when the KSE-100 index topped 117,750 points, the market saw a strong push lower to 113,850 points later in the session.

Some 21 shares rose while 75 fell, with Engro Holdings (+4.08%), Fauji Fertiliser (+0.42%) and Mehmood Textile Mills (+7.39%) contributing the most to index gains. Conversely, United Bank Limited (-2.4%), Pakistan Petroleum (-3.17%) and Systems Limited (-3.74%) were the biggest index drags, it said.

On the corporate side, WorldCall Telecom (+4.68%) announced that GlobalTech would establish a Centre of Excellence dedicated to artificial intelligence and the Big Data in Pakistan. Besides, Prime Minister Shehbaz Sharif and senior government officials visited the PSX.

With Wednesday's decline, the index failed to breach the recent trading range and "now remains range bound between 111,000 and 118,000", AHL added.

JS Global analyst Muhammad Hasan Ather noted that the index dived 1,904 points, closing at 114,148. The sharp decline came despite PM Sharif's visit as no immediate relief measures were announced, which led to profit-taking, he remarked.

Despite the setback, Ather anticipated a positive outlook with expectations of growth in key sectors and continued economic stabilisation efforts.

KTrade Securities mentioned that stocks faced intense selling pressure, with the benchmark KSE-100 index closing at 114,148, down 1.64% day-on-day. The index earlier reached the intra-day high of 117,750 but failed to find support.

A notable event during the day was that PM Sharif, during his visit to the PSX, expressed interest in fostering greater coordination between the business community and the government. However, the market sell-off was widespread, with all major sectors experiencing declines, it said.

There was a cautious outlook, with focus shifting towards the upcoming results season. Cyclical sectors, including cement and auto, as well as exploration and production firms were expected to outperform once the dust settled, KTrade predicted.

Overall trading volumes increased to 1.1 billion shares compared with Tuesday's tally of 792.8 million. Shares of 464 companies were traded. Of these, 118 stocks closed higher, 293 fell and 53 remained unchanged.

WorldCall Telecom was the volume leader with trading in 520.2 million shares, gaining Rs0.08 to close at Rs1.79. It was followed by Cnergyico PK with 41.3 million shares, losing Rs0.35 to close at Rs7 and Fauji Foods with 34.8 million shares, losing Rs0.41 to close at Rs17.64.

During the day, foreign investors sold shares worth Rs503.9 million, the National Clearing Company of Pakistan reported.