The Pakistan Stock Exchange (PSX) started the week on a bearish note on Monday as the KSE-100 index fell 882 points over investor caution ahead of the federal budget for fiscal year 2025-26, which has been delayed to June 10.
Additionally, the delay in International Monetary Fund's (IMF) approval of Pakistan's circular debt resolution plan further dampened market sentiment. However, trading activity remained robust, with volumes standing at 636 million shares and traded value at Rs18.6 billion.
According to Ahsan Mehanti of Arif Habib Corp, stocks closed lower amid pressure in the pre-budget session. Reports of higher petroleum levies and concerns over the pending IMF approval of the circular debt resolution plan alongside delay in federal budget, which will now be presented on June 10, impacted market sentiment.
Mehanti added that rupee depreciation and geopolitical tensions also played a role in bearish activity at the PSX.
At the end of trading, the benchmark KSE-100 index recorded a decrease of 881.55 points, or 0.74%, and settled at 118,221.12.
In its review, Topline Securities remarked that the bourse experienced profit-taking as uncertainty continued to weigh on investor sentiment. The KSE-100 index shed 882 points and closed at 118,221, after touching the intra-day low of 952 points.
The bearish trend was primarily driven by concerns over delay in the federal budget announcement and the lack of clarity about the IMF conditions tied to it. In the absence of positive triggers, investors chose to trim their positions and adopt a cautious stance, it said.
K-Electric led the volumes chart with 247 million shares traded, closing at its upper circuit, following news that the company had secured a dollar-linked tariff for its transmission and distribution business.
Energy stocks came under pressure amid rumours of a potential delay in the clearance of circular debt, with Pakistan Petroleum Limited (PPL), Oil and Gas Development Company (OGDC) and Pakistan State Oil (PSO) emerging as major losers. Engro Holdings, Systems Limited, PSO, Fauji Fertiliser Company and OGDC erased 452 points from the index, Topline added.
In its commentary, Arif Habib Limited (AHL) noted that the week started off on a negative note, with the KSE-100 index falling towards the 118,000-point range.
Some 30 shares rose while 66 fell. K-Electric (+21.19%), Pakistan Services Limited (+8%) and Attock Refinery (+4.03%) contributed the most to index gains while Engro Holdings (-1.82%), Systems Limited (-3%) and PSO (-3.46%) were the biggest drags, AHL said.0
It pointed out that the National Electric Power Regulatory Authority (Nepra) had approved K-Electric's multi-year distribution tariff for the period FY24 to FY30. The company had proposed a seven-year tariff control period to facilitate long-term investment. For FY24, the average distribution tariff has been set at Rs3.31 per kilowatt-hour (kWh) while the use-of-system charge has been fixed at Rs1,348.66/kW per month.
"The KSE-100 is declining into support of the large price gap, from where the upside is expected to resume and breach 120,000 points," AHL stated.
JS Global analyst Muhammad Hasan Ather commented that the KSE-100 fell 0.8% to the intra-day low of 118,150 as investor sentiment weakened due to the government's delay in presenting the federal budget and ongoing uncertainty surrounding the IMF's fiscal targets.
"Market direction is contingent on clarity from the upcoming IMF discussions and the budget announcement; volatility is likely to persist until fiscal policy details are finalised," Ather said.
Overall trading volumes increased to 635.5 million shares compared with Friday's tally of 338 million. Shares of 467 companies were traded. Of these, 188 stocks closed higher, 235 fell and 44 remained unchanged.
K-Electric was the volume leader with trading in 246.9 million shares, gaining Rs1 to close at Rs5.72. It was followed by WorldCall Telecom with 36.7 million shares, gaining Rs0.02 to close at Rs1.27 and Telecard Limited with 30 million shares, gaining Rs0.93 to close at Rs8.22. During the day, foreign investors sold shares worth Rs90.4 million, the National Clearing Company reported.
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