PSX makes slight recovery after sharp sell-off

KSE-100 index gains 421.57 points in cautious trading ahead of budget

KARACHI:

Pakistan Stock Exchange (PSX) on Tuesday staged a thin recovery in a session marked by both investor concern and confidence, with the market demonstrating remarkable resilience after Monday's sharp sell-off.

The benchmark KSE-100 index successfully absorbed early selling pressure and reversed the momentum. Rather than extending the previous day's downturn, value hunters viewed the lower entry points as a prime buying opportunity. It triggered a fresh wave of accumulation across key industrial and financial sectors.

Buying momentum remained particularly strong in the morning, keeping the index firmly in positive territory, while steady building of positions continued well into the second half. Despite intra-day volatility, the market managed to wipe off recent losses, with the index gaining 421.57 points, or 0.25%, to settle at 171,021.77.

According to Ismail Iqbal Securities, the benchmark index managed to close slightly positive but remained characteristically volatile throughout the session, primarily because market participants chose to maintain a cautious stance ahead of the highly anticipated federal budget announcement.

"A range-bound session was observed at the PSX as investors remained cautious ahead of the federal budget announcement," JS Global Capital analyst Mubashir Anis Naviwala commented. Buying interest emerged in selected index-heavy stocks, helping the market recover from early weakness. The KSE-100 index gained 421 points day-on-day.

Buying was observed in bank, energy and fertiliser stocks, while overall participation remained subdued. Investors were awaiting budget-related measures and clarity on the economic outlook, Naviwala said.

KTrade Securities' equity trader Ahmed Sheraz remarked that the KSE-100 extended its recovery and added 421 points in what proved to be a relatively dull and mixed trading session. Market participants largely stayed cautious amid the lack of a strong domestic trigger and continued uncertainty surrounding developments in US-Iran peace negotiations, where conflicting reports regarding progress and potential roadblocks kept investors on the sidelines.

Sector-wise, performance was mixed, with selective strength emerging in bank, fertiliser, oil & gas and cement stocks. Index gains were primarily driven by Meezan Bank, Fauji Fertiliser, United Bank, Pakistan Petroleum and Pakistan Telecommunication Company, which provided support despite the absence of broad-based buying interest.

Going forward, investor sentiment is likely to remain sensitive to developments pertaining to US-Iran talks and movements in international oil prices. The back-and-forth flow of headlines created uncertainty across regional markets, limiting conviction among participants. In the near term, the market may continue to trade range bound until greater clarity emerges on the geopolitical front and the broader macroeconomic catalysts, Sheraz mentioned.

According to Arif Habib Limited (AHL), the KSE-100 found some stability after Monday's sell-off, with weekly support holding firm at 170,000. A total of 61 stocks advanced, led by Meezan Bank, Fauji Fertiliser and United Bank, which contributed the most to the index gains. On the other side, Bank AL Habib, TRG Pakistan and Askari Bank were the major drags on the index.

Market sentiment also got support from comments by US President Donald Trump, who suggested that an interim peace agreement with Iran could be reached soon, although Tehran was cautious due to the previous unfulfilled US commitments.

Fresh economic data showed that total cement sales plunged 21% year-on-year to 3.8 million tonnes in May. Cement exports also fell sharply, going down by 36% to 632,648 tonnes as compared to 989,434 tonnes in the same period of last year. AHL expects the index to resume its upward trajectory during the week and advance towards the target level of 175,000.

Cumulatively, trading volumes dropped to 550.8 million shares compared with previous tally of 589.8 million. The value of traded shares stood at Rs27.4 billion.

In the ready market, shares of 488 companies were traded. Of these, 221 closed higher, 226 fell and 41 remained unchanged.

WorldCall Telecom was the volume leader with trading in 43 million shares, inching up Rs0.01 to close at Rs1.29. Foreign investors sold shares worth Rs634.3 million, the National Clearing Company reported.