PSX falls over political and security concerns

After a strong rally a day ago, the Pakistan Stock Exchange (PSX) saw a sharp reversal on Tuesday as heavy selling dragged the benchmark KSE-100 down by 3,668 points.

Investors were cautious amid political uncertainty after the Senate passed the 27th Constitutional Amendment by a two-thirds majority. In addition, reports of terrorist attacks added to investor anxiety, leading to broad-based unloading in key sectors.

During the session, the index moved between an intraday high of 161,517 and a low of 157,766, before closing at 157,870.50. Auto assemblers, cement, commercial banks, oil and gas exploration, oil trading companies, power generation and refineries were the main sectors that experienced periods of selling.

KTrade Securities stock trader Ahmed Sheraz commented that the PSX saw a sharp decline on Tuesday as the KSE-100 fell 3,668 points. The sell-off was broad-based, with major sectors such as banking, oil and gas, cement and fertilizers posting significant losses.

Market sentiment was hit by terrorist incidents in Islamabad and Khyber-Pakhtunkhwa, which resulted in loss of lives. Also, fears of potential tension on the border with India prompted caution, he said.

The selling spree was seen in blue-chip stocks including Engro, Oil & Gas Development Company, Hub Power, Fauji Fertiliser, Lucky Cement, Mari Energies, National Bank and Pakistan Petroleum, which contributed mainly to the market decline. Arif Habib Limited (AHL) noted that a disastrous session took the KSE-100 index to the bottom of the 157k-170k range after breakouts in India and Islamabad. Only four stocks advanced while 94 declined with Kot Addu Power (+1%), Bank AL Habib (+0.09%) and Mahmood Textile Mills (+0.6%) among the gainers. On the other hand, Engro Holdings (-3.58%), OGDC (-3.74%) and Hub Power (-2.93%) were the index’s biggest decliners.

With the possibility of rising tensions between Pakistan and India, the PSX could again see increased downside risks, AHL warned. JS Global analyst Muhammad Hasan Ather wrote that the KSE-100 fell on Tuesday, posting one of the sharpest falls in recent sessions. The sell-off was fueled by renewed security concerns amid geopolitical conflicts and heightened political uncertainty following the proposed constitutional amendment.

Total trading volumes rose to 836.4 million shares from Monday’s 783.3 million. The value of traded shares stood at Rs 38.1 billion.

Shares of 484 companies were traded. Of these, 79 stocks closed higher, 364 declined and 41 remained unchanged.

First National Equities was the volume leader with 77.2 million shares traded, gaining Rs 1.39 to close at Rs 22.61. It was followed by K-Electric with 66.9 million shares, down Rs 0.22 to close at Rs 5.12 and WorldCall Telecom with 46.8 million shares, losing Rs 0.07 to close at Rs1.70. Foreign investors were net sellers of shares worth Rs 198 million, according to NCCPL.