Economic worries weigh on stocks

In Business
April 02, 2024



KARACHI:

Pakistan Stock Exchange (PSX) on Monday displayed a mixed performance but registered losses as profit-taking intensified towards the end of March quarter amid growing concerns over economic uncertainty.

In the morning, trading began on a robust note, with the KSE-100 index touching its intra-day high of 67,304.36 points. However, the positive momentum died down before midday following release of dismal data that showed a trade deficit of $2.2 billion in March, reflecting a 56.3% year-on-year (YoY) increase.

Additionally, speculation surrounding the outcome of Pakistan’s upcoming talks with the International Monetary Fund (IMF) on April 14, along with investor concerns over the escalating power tariffs added to the downward pressure on the index.

Sectors such as oil and gas, information technology, textile and cement mainly had a negative impact on the market.

With no major positive triggers, the bourse slumped below the 67,000 mark and hit the intra-day low of 66,740.91 points later in the day. Ultimately, the index closed near its day’s low by erasing all the earlier gains.

“Profit-taking was witnessed at the quarter’s end on concerns over economic uncertainty,” said Ahsan Mehanti, MD of Arif Habib Corp.

“Dismal data showing a $2.17 billion trade deficit, which surged 56.3% YoY for March 2024, speculation about the outcome of Pakistan-IMF talks and investor concerns over the surging power tariffs played the role of catalysts in bearish close of the market.”

At close, the benchmark KSE-100 index recorded a loss of 208.79 points, or 0.31%, and settled at 66,796.32.

Read Stocks spike as SBP keeps rate on hold

Topline Securities, in its report, said that the trading session at Pakistan’s stock market was wrapped up with a decline of 0.31%, or 209 points, at 66,796.

“Throughout the day, the index displayed a mixed performance, hitting the intra-day high and low at 67,304 and 66,741 points, respectively,” it said.

Oil and gas, IT, textile and cement sectors contributed negatively to the index where Oil and Gas Development Company (OGDC), Systems Limited, PTCL, Lucky Cement and Interloop Limited collectively shed 133 points.

On the flip side, Hub Power, Meezan Bank and Faysal Bank made a positive contribution, adding a total of 67 points, Topline added.

Arif Habib Limited (AHL), in its review, said there was “a soft start to the week with recent leaders, Pakistan International Airlines (-7.17%) and PTCL (-7.28%), being in the red.”

Hub Power (+0.83%), Meezan Bank (+0.62%) and Faysal Bank (+4.35%) were among major gainers, it said, adding that for March the KSE-100 saw gains of 3.8% amid optimism related to the IMF programme and privatisation of state-owned enterprises.

JS Global analyst Mubashir Anis Naviwala observed that the market saw profit-taking where the index closed down 209 points at 66,796. KSE-100 volumes were also low at only 80 million shares.

“The market is expected to consolidate at these levels and investors should view dips as an opportunity to accumulate value stocks,” the analyst added.

Overall trading volumes decreased to 238.8 million shares against Friday’s tally of 313.04 million. The value of shares traded during the day was Rs8.4 billion.

Shares of 335 companies were traded. Of these, 139 stocks closed higher, 176 dropped and 20 remained unchanged.

Pakistan International Airlines was the volume leader with trading in 39.97 million shares, losing Rs2.26 to close at Rs29.28. It was followed by Agritech Ltd with 31.1 million shares, gaining Rs1.55 to close at Rs28.33 and PTCL with 21.2 million shares, losing Rs1.33 to close at Rs16.94.

Foreign investors were net buyers of shares worth Rs12.7 million, according to the NCCPL.

Published in The Express Tribune, April 2nd, 2024.

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