KARACHI: The KSE-100 index of the Pakistan Stock Exchange (PSX) fell sharply on Monday as widespread pessimism resulted from the latest round of rupee depreciation and the release of the President’s statement regarding his refusal to sign the Pakistan Army and Official Secrets Bills.
After a promising start, during which the market reached an intraday high of 48,234.25 points, the bourse began a downward trend.
After lunchtime, the benchmark index gave in to selling pressure as investors remained wary in the absence of any positive triggers.
Bearish feeling was sparked by the recent decline. The market was under pressure because of investors’ worries about the $809 million current account deficit, disappointing profits forecast, and rumors of future hikes in industrial electricity tariff.
Investor incentives were dampened because of the Refinery Policy announcement.
The KSE-100 index failed to stay above 48,000 points due to profit taking in other industries, and it dropped to an intraday low of 47,432.71 points in the final hour before closing the day down.
“Stocks fell across the board as investors awaited news on the President’s controversial comments regarding his decision to sign the Pakistan Army and Official Secrets Bills.” remarked Ahsan Mehanti, CEO of Arif Habib Commodities.
To quote the WSJ: “Slump in rupee, investor concerns for dismal data of $809m current account deficit in Jul’23 and weak earnings outlook amid expected further hike in power tariff and POL prices played a catalyst role in bearish close.”
The benchmark KSE-100 index lost 770.54 points (1.6%) to end the day at 47,447.95.
According to a study by Topline Securities, Monday was “a day full of pessimism.”
Pakistani equities started the week on a cautiously upbeat note, but they were hit by a selling frenzy soon after the market opened, and they remained under pressure all day as unfavorable conditions prevailed.
Once in surplus for four months running, the Current Account now faced a loss of $0.8 billion. The value of the Pakistani Rupee against the US Dollar has also been steadily declining; today’s closing rate in inter-bank trading was 297.13, a drop of 0.45% from the day before.
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Investors were disappointed by the announced Refinery Policy incentives, and to far, little progress has been made on the Circular Debt Management Plan.
Topline said that these elements are potential contributors to the observed bearish trend.
After a lackluster Monday trading session, Arif Habib Limited (AHL) predicted that prices would drop below the 46-47k support zone.
With an effective date of September 15, it was noted that “the main contributors to the declines were United Bank (-3.57%), Oil and Gas Development Company (-2.87%), and Habib Bank (-2.66%),” and that “in the FTSE Rebal, Pakistan Petroleum has been moved from Mid to Small Cap, MCB Bank has been moved from Small Cap to Micro, and Meezan Bank has been added to Micro Cap.”
A dearth of positive triggers kept the bourse under pressure all day, according to JS Global analyst Muhammed Waqar Iqbal.
He also noted that people were grabbing profits from all sectors.
In the future, the analyst suggests that investors “use any downside as an opportunity to buy in the Construction and Export-oriented sectors.”
On the whole, 211.23 million shares changed hands, down from Friday’s 254.8 million. Shares worth a total of Rs7.07 billion changed hands today.
Stocks from 323 different firms changed hands. There were 50 equities that ended the day higher, 253 that ended down, and 20 that were unchanged.
With 51.4 million shares changing hands, WorldCall Telecom led in volume and finished with a gain of Rs0.02 to Rs1.27. In second place, with 8.4 million shares, was K-Electric, which gained Rs0.05 to end at Rs2.23, and in third place, with 7.3 million shares, was Oil and Gas Development Company, which lost Rs2.85 to close at Rs96.44.
According to the NCCPL, foreign investors net bought shares worth Rs388.9 million.
