LSM decline pulls stocks down by 659 points
Shares of 362 companies were traded. At the end of the day, 212 stocks closed higher. PHOTO: FILE
The stock market ended lower on Thursday, weighed down by weak economic indicators and concerns over large-scale manufacturing (LSM) contraction, which declined 1.3% during July-November 2024.
Investor sentiment remained subdued as expectations of a cautious monetary policy stance by the State Bank of Pakistan (SBP), rupee instability and heightened political noise added to the bearish outlook.
"Stocks closed lower amid a weak economic outlook and concerns over the dismal LSM data that showed a contraction of 1.3% for July-November 2024," said Arif Habib Corp MD Ahsan Mehanti.
"Expectations of a cautious SBP policy rate cut this month, rupee instability and ongoing political noise played the role of catalysts in bearish activity," he said.
At the end of trading, the benchmark KSE-100 index posted a decline of 658.96 points, or 0.58%, and settled at 113,836.74.
Arif Habib Limited (AHL), in its report, wrote that the PSX saw more consolidation within the tighter range 112k-115.5k.
Some 34 shares rose while 63 fell with Engro Holdings (+2.38%), Habib Metropolitan Bank (+1.78%) and Pakgen Power (+3.62%) contributing the most to index gains. On the other hand, Pakistan Petroleum Limited (PPL, -1.96%), PSO (-2.95%) and Fauji Fertiliser Company (FFC, -0.88%) were the biggest drags, it said.
AHL pointed out that Pakistan Bureau of Statistics (PBS) data indicated a 3.81% year-on-year (YoY) decline in LSM production for November 2024. The LSM Industries Index stood at 108, reflecting a 1.2% month-on-month decrease compared to 109.3 in October.
During 5MFY25, 11 out of 22 sectors saw a negative growth. Automobile (+89.1% YoY) saw the highest growth. "Heading into the last session of the week, the KSE-100 is currently up 0.5% week-on-week."
Topline Securities' market review said that the trading session registered a decline as the index settled at 113,837, down 659 points or 0.58%. The decline was primarily driven by the lack of positive triggers, along with uncertainty surrounding the new US government strategy and its impact, it said.
Major contributors to the negative movement included FFC, PPL, PSO, Mari Petroleum and Millat Tractors, which together accounted for a loss of 392 points. Market activity remained strong, with trading in 469 million shares and a total value of Rs25 billion, Topline added.
JS Global analyst Muhammad Hasan Ather said that the KSE-100 index fell 659 points to close at 113,837. The decrease was due to foreign fund outflows, political noise, rupee instability and a cautious stance taken by investors, he said.
However, investors' interest in the main board hinted at future gains. "With the resolution of political issues and economic stability, the market has the potential to rebound, offering a positive outlook for investors. Also, the market expects another rate cut in the upcoming monetary policy statement," the JS analyst added.
Overall trading volumes were recorded at 469.4 million shares compared with the previous session's tally of 659.4 million. The value of shares traded during the day was Rs24.98 billion.
Shares of 464 companies were traded. Of these, 137 stocks closed higher, 268 fell and 59 remained unchanged.
WorldCall Telecom was the volume leader with trading in 103.7 million shares, gaining Rs0.06 to close at Rs1.86. It was followed by Cnergyico PK with 37.1 million shares, losing Rs0.18 to close at Rs6.88 and Dewan Motors with 19.3 million shares, gaining Rs4.16 to close at Rs45.74.
During the day, foreign investors sold shares worth Rs902.4 million, according to the NCCPL.