The PSX retreats on the interest rate, the revision of the IMF uncertainty

KARACHI:

In a heavily bearish session, the Pakistan Stock Exchange (PSX) fell over 950 points on Tuesday as a host of factors including a weakening rupee, uncertainty ahead of the monetary policy announcement, high inflation and the upcoming International Monetary Fund review (IMF) moderated. investment spirit.

Although trading started on a positive note when the KSE-100 hit an intraday high of 65,859.63, profit-taking started very soon, causing extensive selling and a gradual decline in the KSE-100.

Concerns about a possible deal to impose further taxes during the government’s talks with the IMF on a new loan program combined with the upcoming monetary policy announcement dragged the market lower. In addition, the finance minister’s statements about the challenges expected in the 24th year, along with concerns about a possible increase in industrial gas tariffs, undermined the investor sentiment. In particular, the fertilizer, exploration and production (E&P) and power sectors strongly influenced the index.

Consequently, the index fell below the 65,000 mark, touching an intraday low of 64,664.66 points.

“Equities closed lower on weak rupee and uncertainty over March 18 monetary policy announcement amid high inflation and IMF review from March 14,” said MD Arif Habib Corp Ahsan Mehanti. “Finance minister’s comments that FY24 will be a tough financial year, concerns over rising industrial gas tariffs and uncertainty over the outcome of Pakistan-IMF talks on a fresh loan played a catalyst role in the negative close at PSX”.

Reading: PSX wipes out all gains, falls marginally

At the close, the KSE-100 index plunged 953.60 points, or 1.45%, to settle at 64,801.70.

Topline Securities Deputy Head of Sales, Ali Najib, in his report, said at the high of the day, profit-taking started and then turned into a general selling spree.

“The selling trend can be attributed to concerns related to the upcoming monetary policy announcement (scheduled for March 18) and the expectation of further taxation in the wake of the government’s dialogue on a new IMF program,” he said.

Fertilizer, E&P and power sectors contributed negatively to the index as Dawood Hercules Corporation, Oil and Gas Development Company, Pakistan Petroleum, Hub Power and Engro Corporation shed 341 points, Najib added.

Arif Habib Limited (AHL), in its report, noted that there was a “strong bearish session with 80 stocks declining and only eight advancing”.

“Dawood Hercules (-7.5%), Oil and Gas Development Co (-3.35%) and Pakistan Petroleum (-3.11%) were the biggest drags on the index,” it said, adding that Prime Minister chose a former banker as finance. Minister in a major shift to technocrats to steer the economy and negotiate a new loan package with the IMF.

“The monetary policy committee meeting is scheduled to convene on March 18 with a high probability of considering starting the rate reversal cycle by implementing a 100 basis point cut,” AHL noted.

JS Global analyst Mubashir Anis Naviwala said the decline continued as the KSE-100 lost 954 points.

“Going forward, we recommend that investors remain cautious at current levels and wait for declines for any new purchases,” the analyst added.

Total trading volume fell to 321.7 million shares from Monday’s 548.8 million. The value of shares traded during the day was Rs 10.9 billion.

Shares of 328 companies were traded. Of these, 57 stocks closed higher, 254 declined and 17 remained unchanged.

Hascol Petroleum was the volume leader with 29.3 million shares traded, shedding Rs 0.36 to close at Rs 8.14. It was followed by Pakistan International Airlines Corp with 28.9 million shares, gaining Rs 0.07 to close at Rs 18.10 and Cnergyico PK with 25.5 million shares, losing Rs 0.34 to close at Rs 4.77 .

Foreign investors were net buyers of shares worth Rs 98.5 million, according to NCCPL.

Published in The Express Tribune, March 13^u2024.

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