KARACHI:
Pakistan Stock Exchange (PSX) on Tuesday endured a volatile trading session as the KSE-100 index lost nearly 1,100 points in a bearish activity driven by global equity sell-offs, rising geopolitical tensions in the Middle East and disappointing domestic remittances data.
Analysts also attributed the market downturn to concerns over a potential shortfall in the government’s tax collection, weak global crude oil prices and the unresolved issues pertaining to the International Monetary Fund (IMF) targets under a $7 billion Extended Fund Facility.
Despite the initial bullish momentum, profit-taking dominated as the session progressed, with the index swinging in a 4,000-point range.
Market participants exercised caution owing to the banking sector’s concerns about the advance-to-deposit ratio (ADR) condition and a slowdown in auto-sector sales.
In his analysis, Ahsan Mehanti of Arif Habib Corp commented that stocks closed bearish following global equities’ sell-off due to escalating geopolitical tensions in the Middle East and dismal remittances data, which fell 5% month-on-month in November.
He added that market consolidation amid concerns over the government’s tax collection shortfall, weak global crude oil prices and the unresolved slippages in the IMF’s targets played the role of catalysts in bearish activity at the PSX.
At the end of trading, the benchmark KSE-100 index recorded a decrease of 1,073.74 points, or 0.98%, to 108,896.65.
Topline Securities cited in its market review that the KSE-100 index experienced a volatile trading session as it oscillated within a massive 4,000-point range.
The much-needed profit-booking took centre stage, with the index recording the intra-day high of 1,789 points and intra-day low of 2,258 points before closing at 108,897, it said.
The session began on a bullish note, driven by robust buying interest in key sectors following encouraging macroeconomic developments. However, the gains proved short-lived as investors opted to lock in profits, especially in heavyweight sectors, leading to a sharp intra-day decline.
Despite the turbulence, the market managed to close off its lows, signalling underlying investor confidence, Topline said.
observed that Sazgar Engineering from the auto sector closed 5.5% lower on the back of a decline in month-on-month sales of four wheelers. The company reported sales of 584 units in November, a significant drop from the 1,002 units sold in October.
Topline added that concerns surrounding the ADR cast a shadow over the banking sector, with Bank AL Habib, MCB Bank, UBL and Bank Alfalah facing the brunt of the pressure and closing lower.
Major contributors to the index’s surge were Mari Petroleum, Lucky Cement, Attock Refinery, Systems Limited and The Searle Company, which added 508 points. On the flip side, UBL, Bank AL Habib, MCB Bank, Engro Fertilisers and Engro Corp dragged the index down, erasing 629 points, it said.
In its report, AHL commented “Tuesday reminded the market that it moves in both directions and printed a ‘down daily candle’ for the first time since November 26.”
Some 29 shares rose while 70 fell with the biggest upside contribution coming from Mari Petroleum (+5.52%), Lucky Cement (+3.03%) and Attock Refinery (+8.68%). The largest drags included UBL (-2.65%), Bank Alfalah (-4.46%) and MCB Bank (-3.47%), it said.
AHL added that Citi Pharma (+8.53%) signed a memorandum of understanding with Martin Dow and Kingbo for developing and manufacturing new biotech/biologic products to reduce Pakistan’s reliance on imported medicines.
Additionally, TRG Pakistan (+0.21%) announced that Afiniti had completed its recapitalisation with secured lenders, led by Vista Credit.
The KSE-100 tested support and a recovery should be expected above 107,000 points, AHL added.
JS Global analyst Muhammad Hasan Ather wrote that the KSE-100 index witnessed a slight pullback after a prolonged bullish rally, closing at 108,897, down 1%, mainly led by profit-taking.
Despite a month-on-month dip in remittances, the inflows remained at significantly higher levels on a cumulative basis. Improving macroeconomic indicators, lower inflation and expectations of further rate cuts would likely keep market sentiment positive, Ather added.
Overall trading volumes decreased to 1.55 billion shares against Monday’s tally of 1.59 billion. The value of shares traded during the day was Rs68.8 billion.
Shares of 469 companies were traded. Of these, 106 stocks closed higher, 329 fell and 34 remained unchanged.
WorldCall Telecom was the volume leader with trading in 200.9 million shares, falling Rs0.17 to close at Rs1.66. It was followed by Cnergyico PK with trading in 150.7 million shares, falling Rs0.19 to close at Rs6.94 and K-Electric with 73 million shares, falling Rs0.25 to close at Rs5.91.
During the day, foreign investors bought shares worth Rs1 billion, according to the NCCPL.
