Economic concerns are weighing on stocks

KARACHI:

The Pakistan Stock Exchange (PSX) posted a mixed performance on Monday but posted losses as profit-taking intensified towards the end of the March quarter amid growing concerns about economic uncertainty.

In the morning, trading got off to a brisk start with the KSE-100 hitting an intraday high of 67,304.36. However, the positive momentum faded before midday after the release of dismal data showing a trade deficit of $2.2 billion in March, reflecting a 56.3% year-on-year (y-o-y) increase.

Additionally, speculation surrounding the outcome of Pakistan’s upcoming talks with the International Monetary Fund (IMF) on April 14, along with investor concerns over escalating electricity tariffs added to downward pressure on the index.

Sectors such as oil and gas, IT, textiles and cement mainly had a negative impact on the market.

With no major positive triggers, the stock fell below the 67,000 mark and touched an intraday low of 66,740.91 later in the day. Finally, the index closed near the low of the day erasing all previous gains.

“Profit taking was seen at the end of the quarter due to concerns over economic uncertainty,” said Ahsan Mehanti, MD of Arif Habib Corp.

“The dismal figures showing a trade deficit of $2.17 billion, which rose 56.3% year-on-year to March 2024, speculation about the outcome of Pakistan-IMF talks and investor concerns over rising tariffs of electricity played a catalytic role in the bearish closing of the market”.

At the close, the KSE-100 lost 208.79 points, or 0.31%, to settle at 66,796.32.

Reading Stocks bounce as SBP keeps rate on hold

Topline Securities, in its report, said the Pakistan Stock Exchange ended the session down 0.31%, or 209 points, at 66,796.

“Throughout the day, the index saw a mixed performance, reaching intraday highs and lows of 67,304 and 66,741 points, respectively,” it said.

Oil and gas, IT, textiles and cement sectors were negative contributors to the index where Oil and Gas Development Company (OGDC), Systems Limited, PTCL, Lucky Cement and Interloop Limited collectively lost 133 points.

On the other hand, Hub Power, Meezan Bank and Faysal Bank contributed positively, adding a total of 67 points, Topline added.

Arif Habib Limited (AHL), in its review, said there has been “a soft start to the week with recent leaders Pakistan International Airlines (-7.17%) and PTCL (-7.28%) in the red”.

Hub Power (+0.83%), Meezan Bank (+0.62%) and Faysal Bank (+4.35%) were among the big gainers, it said, adding that for March the KSE-100 3.8% gains amid IMF-related optimism. program and privatization of state enterprises.

JS Global analyst Mubashir Anis Naviwala noted that the market took profit as the index closed down 209 points at 66,796. KSE-100 volumes were also low at just 80 million shares.

“The market is expected to consolidate at these levels and investors should see the declines as an opportunity to accumulate value stocks,” the analyst added.

Total trading volume fell to 238.8 million shares compared to Friday’s 313.04 million. The value of shares traded during the day was Rs 8.4 billion.

Shares of 335 companies were traded. Of these, 139 stocks closed higher, 176 declined and 20 remained unchanged.

Pakistan International Airlines was the volume leader with 39.97 million shares traded, shedding Rs 2.26 to close at Rs 29.28. It was followed by Agritech Ltd with 31.1 million shares, gaining Rs 1.55 to close at Rs 28.33 and PTCL with 21.2 million shares, losing Rs 1.33 to close at Rs16.94.

Foreign investors were net buyers of shares worth Rs 12.7 crore, according to NCCPL.

Published in The Express Tribune, April 2^n.d2024.

Like Businesses on Facebook, follow @TribuneBiz on Twitter to stay updated and join the conversation.