KARACHI: Pakistan Stock Exchange (PSX) saw a steep decline on Monday, losing about 1,600 points due to political uncertainty following the government’s plan to potentially impose a ban on the main opposition party. This continued the trend from the previous week.
Earlier, the KSE-100 index hit its intraday high of 80,085.63 points, suggesting that the trading day started on a bullish note. The excitement, though, was short-lived as the index began to decline before midday.
The decline was mostly ascribed to panic selling in the run-up to corporate earnings. The mix of political unrest, unpaid debt from Chinese independent power producers (IPPs), and domestic security concerns made the fall worse.
The absence of encouraging indicators caused the market to drop to its intraday low of 78,404.76 points just after lunchtime. The market stayed negative despite a few attempts at recovery, ultimately closing close to the day’s low with large losses.
Ahsan Mehanti, MD of Arif Habib Corp., stated that “stocks closed sharply lower on political uncertainty after the government’s move to place a ban on the main opposition party.”
“A bearish close at the PSX was sparked by panic selling during the earnings season due to political noise, uncertainty about the settlement of Chinese IPPs’ dues, and concerns over the security situation in the country.”
The benchmark KSE-100 index fell 1,578.70 points, or 1.97%, at the close of trading to settle at 78,539.19.
“Continuing its last week’s trend, Pakistan equities resumed the week on a negative note,” stated Topline Securities in its report.
It stated that Monday’s selling frenzy may be attributed to “uncertain vibes from the political landscape, continuous institutional offloading, and first-day selling in roll-over week.” According to Topline, the index lost 495 points due to blue-chip stocks such as Hub Power, Engro Corporation, Fauji Fertiliser, Oil and Gas Development Company, and Pakistan Petroleum. However, Sui Northern Gas Pipelines, Habib Bank, and Avanceon saw some buying interest as they gained 44 points.
The PSX had a “weak open at the start of the week as politics continued to disrupt the upside momentum,” according to a report from Arif Habib Limited (AHL).
Thirteen stocks increased while eighty-seven declined, with the largest index drags being Hub Power (-3.25%), Engro Corp (-3.34%), and Fauji Fertiliser (-2.48%). The biggest upward contributions were Sui Northern Gas Pipelines (+4.07%), Habib Bank (+0.52%), and Avanceon (+1.19%), according to the statement.
According to media reports, senior members of the Pakistan Tehreek-e-Insaf (PTI) were detained by police in Islamabad. This, along with a news conference by the ISPR DG, alarmed the market, AHL continued.
Because of the elevated political climate in the nation, bears dominated the stock market, according to JS Global analyst Mubashir Anis Naviwala, who saw the KSE-100 lose 1,713 points in intraday trade.
The analyst continued, “Going forward, we advise investors to exercise caution at these levels and wait for opportunities during market dips.”
Compared to Friday’s total of 479 million shares, the overall trading volume dropped to 375.6 million shares. Over the course of the day, shares worth Rs. 19.35 billion were traded.
446 firms’ shares were exchanged. Out of these, 319 stocks closed lower, 47 stayed the same, and 80 stocks closed higher.
K-Electric, which traded 33.4 million shares and finished at Rs4.41 after losing Rs0.12. Following it were PIA Holding Company with 19.2 million shares, which closed at Rs17.02 after losing Rs1.57, and Pak Elektron with 23.6 million shares, which gained Rs0.21 to conclude at Rs26.59.
According to the NCCPL, shares valued at Rs1.04 billion were net purchases made by foreign investors.
