PSX stumbles as selling pressure mounts
The Pakistan Stock Exchange (PSX) endured a turbulent trading session on Tuesday as selling pressure mounted in the final hours, dragging the benchmark KSE-100 index down by 752 points.
The market's downturn was primarily influenced by an uncertain economic outlook and a decline in international markets, said analysts.
Earlier, the day began in the green and the market maintained its positive momentum until after midday, when it touched the intra-day high at 162,345. Thereafter, investors turned risk averse, leading to a profit-taking spree across major sectors such as automobile, cement, commercial banks, fertiliser and oil & gas exploration.
Before the end of trading, the index hit the intra-day low at 160,584, but recouped some of the losses immediately. It closed the day at 160,935, lower by 0.47%.
In major economic news, Pakistan's trade deficit widened due to a surge in imports and slowdown in exports, impacting the confidence of investors, who treaded cautiously.
KTrade Securities' equity trader Ahmed Sheraz commented that PSX presented a mixed-to-negative performance despite a positive open. Market flow and price action indicated another spell of stock selling, most likely driven by an uncertain economic outlook. The benchmark index dropped 752 points to close at 160,935, after touching the intra-day high at 162,345. Early gains were capped as profit-taking dominated the session, he said.
Banks were the primary drag on the index while Pioneer Cement and Pakistan Oilfields offered support. Among the laggards were Engro Holdings, Meezan Bank, Bank AL Habib, United Bank, Kohinoor Textile and MCB Bank.
Market participation remained robust as the KSE All-Share Index recorded a turnover of 1.5 billion shares, Sheraz said. He expected investors to stay focused on progress pertaining to the IMF loan tranche and the geopolitical environment.
Arif Habib Limited (AHL) observed that in yet another session, the KSE-100 struggled to stay in the green and experienced a sell-off before close. Some 33 shares rose while 64 fell, where Pioneer Cement (+10%), Pakistan Oilfields (+2.25%) and DG Khan Cement (+1.33%) contributed the most to index gains. Conversely, Engro Holdings (-1.67%), Meezan Bank (-1.41%) and UBL (-0.67%) were the biggest index drags, it said.
At the diplomatic level, AHL mentioned, Russian Foreign Minister Sergei Lavrov would hold talks with Pakistani counterpart Ishaq Dar in Moscow. Also, Pakistan International Airlines has signed an agreement with Biman Bangladesh Airlines to expand cargo business and minimise logistic complexities in transporting commodities.
Topline Securities stated that the bourse witnessed a tug of war between bulls and bears. The index swung to the intra-day high of 657 points before slipping to the day's low of 1,103 points. Despite early attempts at staging a rebound, the bears ultimately seized control as the benchmark index closed at 160,935, down 752 points.
With international markets trading in the red, the local bourse followed suit, while a lack of fresh positive news flow prompted investors to trim their positions and book profits, it said.
Pioneer Cement, Pakistan Oilfields, Pakistan Services and DG Khan Cement posted gains, contributing 206 points to the index. On the flip side, Engro Holdings, Bank AL Habib and United Bank pushed the index down by 360 points, Topline added.
Overall trading volumes increased to 1.5 billion shares compared with Monday's tally of 1.2 billion. The value of traded shares stood at Rs38.9 billion.
Stocks of 474 companies were traded. Of these, 179 closed higher, 249 fell and 46 remained unchanged.
WorldCall Telecom was the volume leader with trading in 459.3 million shares, rising Rs0.21 to close at Rs2.05. It was followed by Bank Makramah with 166.2 million shares, gaining Rs0.27 to close at Rs5.99 and Beco Steel with 134.3 million shares, inching up Rs0.04 to close at Rs8.18. Foreign investors were net sellers of shares worth Rs176.3 million, according to NCCPL.