PSX declines amid political unrest

Pakistan Stock Exchange (PSX) saw a sharp decline in the KSE-100 Index on Tuesday as political unrest in the federal capital aggravated market sentiment.

During intraday trading, the benchmark index fell more than 2,400 points.

According to the PSX website, the market had a negative opening with KSE-100 falling over 600 points in the first hours. However, as of 11:00 a.m., there was a brief recovery in the market due to significant buying activity in the banking sector, and the KSE-100 index rose to its highest level of 99,819.59.

Despite the early recovery, the index quickly reversed direction. As of 12:36, KSE-100 decreased by 2,472.04 points to 95,743.68.

At 13:26, the index was traded at 97,100.33 points, down 9,79.59 points or 1.00% compared to the close of the previous session.

Sharp fluctuations in the market reflect investors’ uncertainty in the face of ongoing political developments in the capital.

Earlier, the stock market had another dynamic session on Monday; It made a strong recovery from the beginning of the decline, thanks to strong investor interest in the banking sector and some easing of political noise, and closed at 98,000 points, its all-time high.

After falling to an intraday low of 97,137.63 points at the start of trading, the KSE-100 index quickly recovered and jumped to an intraday high of over 99,300 points well before mid-day. At this point investors resorted to profit booking and erased some of the gains. The index eventually settled at 98,080 with an increase of 282 points.

The best performers of the day in terms of volume were Hascol Petroleum with 65 million shares, Cnergyico PK with 48 million shares and Fauji Foods with 41 million shares.

Looking ahead, the market is expected to continue its upward trend, supported by encouraging macroeconomic indicators. However, increasing political uncertainties may pose an obstacle and force investors to act cautiously.

Ahsan Mehanti of Arif Habib Corp said in his analysis that stocks closed higher, led by the banking sector, as strong earnings outlook and Islamabad High Court’s ban on protests in the capital eased political noise.

He noted that pressure was building mid-session due to transfer of future contracts, uncertainty over the outcome of Pakistan Tehreek-e-Insaf (PTI) protests and geopolitical tensions. However, Pakistan Stock Exchange (PSX) closed on a bullish note, driven by optimistic economic indicators, rupee stability and increasing foreign exchange reserves. At the end of the transaction, the benchmark KSE-100 index increased by 281.55 points, or 0.29%, to 98,079.78 points.

Topline Securities stated in its report that the stock market maintained its upward trend and reached its intraday high level of 99.317. Investor confidence is supported by speculation that the State Bank of Pakistan (SBP) may relax banks’ requirements regarding minimum deposit rate for savers, it said.

The biggest contributors to the rise of the index were Bank AL Habib, United Bank Limited, Meezan Bank, Systems Limited and MCB Bank, which added 555 points in total. Trading activity remained strong with volume of 640 million shares and a value of R25.6 billion. Topline added that Hascol Petroleum led the volume chart with 65 million shares changing hands during the session.

Arif Habib Limited (AHL) commented in its research report that PSX faced another choppy session due to erosion of early gains which left KSE-100 limited to a daily gain of 0.29%.

Bank AL Habib (+6.75%) made the biggest contribution to the index gains, with around 54 stocks rising and 43 stocks falling. Notable movements were noted in Sui Southern Gas Company (+10%), Waves Home Appliances (+10.05%) and Hascol Petroleum (+9.97%). AHL said “supply is coming to the market below the 100 thousand level and the market may be looking for an excuse for correction” and pointed out that the events in Islamabad will probably determine the direction of the market. “Support remains at 94 thousand and the current index range is 97.2 thousand to 99.6 thousand,” he added.

JS Global analyst Mubashir Anis Naviwala wrote that PSX made strong gains and broke the 99,300 intraday resistance on strong volumes. The market rose as high as 99,317 before the KSE-100 index closed at 98,080, up 282 points.

Trading volumes were healthy and reached 640 million shares. He said the activity was led by Hascol Petroleum, Cnergyico PK, Fauji Foods, Wordcall Telecom and K-Electric.

Going forward, he suggested a buy-the-dip strategy focusing on the cement, exploration and production, and technology sectors.

Overall trading volumes fell to 640.3 million shares, compared to Friday’s 1.25 billion. The value of shares traded during the day was Rs 25.6 billion.

Shares of 460 companies were traded. Of these, 220 closed higher, 185 decreased and 55 remained unchanged.

Hascol Petroleum was the volume leader with 64.8 million shares traded and closed at Rs 12.35, up Rs 1.12. Cnergyico PK with 48.1 million shares closed at Rs 4.71, gaining Rs 0.22, while Fauji Foods closed at Rs 12.26, gaining Rs 0.52 with 40.9 million shares.

According to NCCPL, foreign investors sold shares worth Rs 1.45 billion during the day.