PSX rises 794 points in late-session recovery

Index recoups early losses; higher-than-forecast trade gap caps gains

KARACHI:

Trading at the Pakistan Stock Exchange (PSX) remained highly volatile on Tuesday, as investors reacted with caution to fresh economic data and shifting intra-day sentiment.

Pakistan's trade deficit widened 3.82% year-on-year (YoY) to over $4 billion in April, which weighed on investor confidence. Soon after the opening bell, the benchmark KSE-100 index lost over 1,300 points, which reflected cautious market behaviour due to concerns over external account pressures.

The bourse, however, staged a gradual recovery as the session progressed. While trading remained choppy with the index swinging between gains and losses, buying interest emerged in the latter half, helping the market rebound strongly. The index moved between the intra-day high of 164,920.35 and low of 162,532.99. Eventually, the market posted modest gains of 793.53 points, or 0.48%, and settled at 164,742.47.

"Investors are closely tracking progress in US-Iran peace negotiations, as any breakthrough will trigger a strong market rally that is trading at attractive multiples," AKD Securities Director Research Mohammed Awais Ashraf told The Express Tribune. On a sequential basis, Pakistan's trade deficit increased by $1.2 billion primarily because of a surge in imports due to higher oil prices, he said.

KTrade Securities equity trader Ahmed Sheraz noted that the KSE-100 closed up 794 points (+0.48%) in a slow and directionless session. The index spent most of the day drifting in a tight band, flipping between the green and the red. Volumes on the KSE-100 remained subdued at 210 million shares, reflecting weak conviction on both sides. Support came primarily from commercial banks and selective exploration & production names including Pakistan Petroleum, MCB Bank, OGDC, Bank Alfalah, Meezan Bank, and Fauji Fertiliser.

Regional cues stayed mixed to negative, keeping risk appetite in check, while Brent crude hovering near $113/barrel continued to cast a long shadow over Pakistan's external position. With April's trade deficit crossing $4 billion, pressure on the macro front was quietly building, and any further spike in oil could tighten the screws, Sheraz said.

According to Arif Habib Limited (AHL), it was a constructive session where the market opened "gap down", which was the low of the day, and rallied later to close near highs. Some 52 shares rose while 47 fell with FFC (+1.23%), PPL (+3.25%) and MCB Bank (+2.71%) contributing the most to the index gains. On the flip side, Hub Power (-1.54%), Lucky Cement (-0.51%) and UBL (-0.21%) were the biggest index drags.

Globally, the fragile US-Iran ceasefire remained in place after a day of clashes involving ships in the Strait of Hormuz and missile attacks on the UAE. In Pakistan, the trade deficit widened more than expected to $4.07 billion in April compared with a $2.99 billion deficit forecast by economists in a Bloomberg survey.

Meanwhile, Deputy PM Ishaq Dar was informed by the petroleum ministry that Pakistan had sufficient reserves of petroleum products till the third week of June. "The KSE-100 continues to trade around the 200-day moving average with strong demand emerging after a weak opening. The 170k level can be seen this week with 175k still our near-term target," AHL said.

Overall trading volumes decreased to 453.2 million shares against Monday's total of 696.7 million. The value of shares traded during the day stood at Rs22.8 billion.

Shares of 484 companies were traded. Of these, 221 stocks closed higher, 210 fell and 53 remained unchanged.

The Bank of Punjab was the volume leader with trading in 45.3 million shares, gaining Rs0.57 to close at Rs35.06. Foreign investors bought shares worth Rs222.1 million, the National Clearing Company reported.