The Pakistan Stock Exchange (PSX) witnessed a turbulent start to the week, with the benchmark KSE-100 Index closing nearly flat amid rising tensions with India and SBP policy uncertainty. The index dipped steeply in early trading, falling by 1,036 points. However, it made a strong recovery in the second half, mainly supported by the cement sector, while other stocks closed lower. The index closed the day down by only 11.70 points, or 0.01%, at 114,102.24.
Analysts noted that while there may be a positive reaction to the 100 bps rate cut by the central bank, investors remained cautious given the prevailing geopolitical situation. Ahsan Mehanti of Arif Habib Corp remarked that stocks closed flat as investors remained cautious following the government's security measures to ban Indian trade ties and Indian flag carriers. SBP policy uncertainty and a slump in global crude oil prices contributed to the uncertainty, he noted.
Rupee instability and fears over the outcome of heightened Pakistan-India border tensions played a catalyst role in the bearish close, added Mehanti. At the close of trading, the benchmark KSE-100 index recorded a decline of 11.70 points, or 0.01%, and settled at 114,102.24.
In its market review, Topline Securities commented that the benchmark index was quite volatile during today's session, falling by 1,036 points in early trading. However, it made a strong recovery in the second half, mainly supported by the cement sector, as investors expected a possible rate cut in the monetary policy announcement made today. The index closed at 114,102 points, down just 12 points, or 0.01%.
This recovery was mostly helped by key stocks like Fauji Fertiliser Company, DG Khan Cement Company, Fauji Cement Company, Pioneer Cement, and Maple Leaf Cement Company, which together added about 276 points to the index, as mentioned by Topline. Investor interest stayed strong, with 398 million shares traded and a total market turnover of Rs19 billion, it added.
In its commentary, Arif Habib Limited (AHL) stated that the week started flat with cement stocks higher and other leading sectors lower. Some 56 shares rose while 42 fell, with Fauji Fertiliser Company (+1.29%), DG Khan Cement (+4.46%) and Fauji Cement Company (+2.79%) contributing the most to index gains.
On the flip side, UBL (-2.17%), Oil and Gas Development Company (-1.49%) and Pakistan Petroleum Limited (-1.56%) were the biggest index drags, remarked AHL. It added that Moody's, in a recent report, stated that sustained tensions with India will weigh on Pakistan's growth, hamper the government's ongoing fiscal consolidation, impair access to external financing and pressure its FX reserves.
Moreover, Pakistan plans to brief the UN Security Council about the recent tensions with India, highlighting the illegal steps taken by India to suspend the Indus Water Treaty, said AHL. The SBP cut the discount rate by -1% to +11%, and expects FX reserves to rise to US$14 billion by June, added the brokerage.
JS Global analyst Muhammad Hasan Ather commented that the KSE-100 index started the week on a volatile note, as investors remained cautious due to ongoing tensions between Pakistan and India, while also awaiting the monetary policy announcement scheduled for later in the day.
Overall trading volumes increased to 399.5 million shares compared with Friday's tally of 372.4 million.
Shares of 452 companies were traded. Of these, 240 stocks closed higher, 155 fell, and 57 remained unchanged.
Power Cement was the volume leader with trading in 41.3 million shares, gaining Rs0.98 to close at Rs14.92. It was followed by WorldCall Telecom with trading in 23.8 million shares, gaining Rs0.07 to close at Rs1.34 and Maple Leaf Cement Company with 23.6 million shares, gaining Rs2.16 to close at Rs71.60. During the day, foreign investors bought shares worth Rs128.9 million, the National Clearing Company of Pakistan Limited (NCCPL) reported.
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