Heavy selling leads to fifth straight loss

KSE-100 index sheds 941 points as flood worries wipe out initial gains

KARACHI:

The Pakistan Stock Exchange (PSX) lost more ground on Wednesday as early optimism gave way to extensive selling in the second half of the trading session. At close, the benchmark KSE-100 index recorded a drop of 941.03 points, or 0.63%, and settled at 147,494.03

Concerns over severe flooding and the resultant human and economic losses in the northern regions of the country triggered a shift in investor sentiment, leading to a sharp downturn in equities.

The index opened on a positive note, climbing steadily during morning hours and reaching the intra-day peak of 149,238 points. However, the upbeat momentum could not be sustained as news of flood devastation began circulating in the mid-session.

This reversal triggered the offloading of stocks across key sectors, pushing the index sharply lower. The day's low was recorded at 147,337, which marked a stark contrast to the earlier highs. It was the fifth straight day of losses for the benchmark index. JS Global analyst Muhammad Hasan Ather commented that the market opened on a strong note, but profit-taking and the lack of fresh triggers led to mixed activity throughout the session.

"Selling pressure intensified towards the close, dragging the index sharply lower. We expect a period of subdued activity going forward," he said.

Topline Securities, in its report, wrote that the local bourse extended its losing streak as contract rollover week jitters kept investors cautious while flood warnings from the National Disaster Management Authority (NDMA) further dampened sentiment.

The authority highlighted a "very high to exceptionally high" flood risk in Lahore and parts of Punjab following heavy rains and release of water by India, with army aid sought in six districts.

The KSE-100 index ended lower by 941 points, slipping beneath the 147,500 mark. Despite an early rebound, selling pressure and risk aversion weighed on the benchmark index, Topline said.

Gains in Meezan Bank, Engro Holdings and MCB Bank added 137 points to the index; however, they were overshadowed by declines in Habib Bank, Fatima Fertiliser, Service Industries, National Bank and Mari petroleum, which dragged the index down by 331 points.

Looking ahead, heightened rollover activity and prevailing flood worries are likely to keep the market volatile, with investors expected to remain cautious, Topline predicted. Arif Habib Limited (AHL) reported that the index extended its downtrend to a fifth consecutive session, sliding into the 147.5k range with some panic in the second half following news of major flooding in the country's north.

Some 21 shares rose while 78 fell, where Meezan Bank (+0.95%), Engro Holdings (+0.61%) and MCB Bank (+0.79%) contributed the most to index gains. On the other side, Habib Bank (-1.38%), Fatima Fertiliser (-5.21%) and Service Industries (-6.42%) were the biggest drags.

Among financial news, AHL said, Pakistan plans to return to international capital markets either this year or next year by most likely floating Panda bonds, as mentioned by Finance Minister Muhammad Aurangzeb, who would be accompanying Prime Minister Shehbaz Sharif to attend the Shanghai Cooperation Organisation (SCO) conference in China next week.

In the current monsoon season, heavy showers triggered flash floods, which prompted PM Sharif to hold an emergency meeting. The meteorological department has warned of intense rainfall in the next 12 to 24 hours across Punjab, AHL added.

Overall trading volumes increased to 856.7 million shares compared with Tuesday's tally of 665.4 million. Traded value stood at Rs29.3 billion.

Shares of 477 companies were traded. Of these, 129 stocks closed higher, 312 dropped and 36 remained unchanged.

Pace (Pakistan) topped the volumes chart with trading in 87.8 million shares, rising Rs1 to close at Rs7.06. It was followed by Bank Makramah with 58.9 million shares, gaining Rs0.39 to close at Rs5.29 and TPL Properties with 42.7 million shares, adding Rs0.45 to close at Rs10.69. Foreign investors sold shares worth Rs638 million, the National Clearing Company reported.