Political security fears drive PSX down

KARACHI:

The Pakistan Stock Exchange (PSX) continued its losing streak on Tuesday as it fell over 900 points amid growing concerns over political noise and security challenges ahead of the country’s elections.

Despite starting trading on a promising note, marked by an intraday high of 63,074.51 points, the KSE-100 index could not sustain the momentum and began a rapid decline before noon.

The downward streak was exacerbated by concerns over the weak economic outlook and pending fiscal reforms for loss-making state-owned enterprises (SOEs).

Additionally, the power sector’s cyclical debt and reports of a six-month budget deficit at 2.3% of gross domestic product (GDP) further helped put downward pressure on the index.

As a result, in the absence of positive action, the market fell to an intraday low of 61,637.62 points, falling even below the psychologically important level of 62,000 points.

The stock market closed the day slightly above its lowest point but recorded significant losses.

“Stocks fell sharply on investor concerns over political noise and security turmoil in the country,” said Arif Habib Corp MD Ahsan Mehanti.

“Weak economic outlook, pending fiscal reforms for loss-making state-owned enterprises, cyclical power sector debt and reports of a six-month budget deficit that soared to 2.3% of GDP played a catalytic role in the volatile closing the market”.

At the close, the KSE-100 index plunged 931.98 points, or 1.48%, to settle at 61,841.74.

Topline Securities, in its report, commented that the KSE-100 index showed a trading range of 1,437 points, reaching an intraday high of 63,075 and a low of 61,638.

Reading PSX falls over 900 points as political uncertainty sparks panic selling

“As a result, Colgate-Palmolive, Meezan Bank, Engro Corporation, Oil and Gas Development Company and Mari Petroleum collectively had a negative impact, contributing to a 350-point drop in the index,” Topline said, adding that as throughout the session, 436 million shares changed hands, which were valued at Rs 15.2 billion.

Arif Habib Limited (AHL), in its commentary, noted that price action remained weak with only 15 stocks advancing and 77 declining.

“Colgate-Palmolive (-7.03%), Meezan Bank (-3.48%) and Engro Corporation (-2.87%) showed the biggest declines in the index, while MCB Bank (+1.45 %), Hub Power (+0.5%) and Rafhan Maize Products (+4.55%) were the biggest upside contributors,” it said.

JS Global analyst Muhammad Shuja Qureshi said the incessant selling pushed the KSE-100 below the 62,000 mark.

“News on the political front further eroded the prevailing negative sentiment,” he said. “Investors are advised to wait out the dips to accumulate value stocks,” the analyst added.

Total trading volumes rose to 436.1 million shares from Monday’s 317.6 million. The value of shares traded during the day was Rs 15.3 billion.

Shares of 346 companies were traded. Of these, 76 stocks closed higher, 249 declined and 21 remained unchanged.

K-Electric was the volume leader with 52.9 million shares traded, shedding Rs 0.2 to close at Rs 4.65. It was followed by WorldCall Telecom with 29.2 million shares, losing Rs 0.02 to close at Rs 1.23 and Hascol Petroleum with 24.7 million shares, gaining Rs 0.15 to close at Rs 7.91.

Foreign investors were net sellers of shares worth Rs 666.4 million, according to NCCPL.

Published in The Express Tribune, January 31^St2024.

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