Stocks dip as economic concerns prevail
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Pakistan Stock Exchange (PSX) on Wednesday experienced a subdued trading session as the KSE-100 index closed marginally lower because of a lack of positive triggers.
Market sentiment was weighed down by several economic factors, including an increase in the Karachi Inter-bank Offered Rate (Kibor) following the State Bank of Pakistan's (SBP) decision to keep the policy rate unchanged and disappointing car sales.
Additionally, the prevailing uncertainty ahead of budget and concerns over the pending International Monetary Fund (IMF) approval of a relief package for industrial power tariffs further dented investor confidence.
Arif Habib Corp MD Ahsan Mehanti commented that stocks faced downward pressure amid a surge in Kibor following status quo in the SBP's monetary policy.
"Dismal data of car sales, which fell 25% month-on-month in February, pre-budget uncertainty and concerns over the pending IMF approval of a relief in industrial power tariffs played the role of catalysts in bearish close at the PSX," he added.
At the end of trading, the benchmark KSE-100 index recorded a decline of 93.12 points, or 0.08%, and settled at 114,084.54.
Topline Securities, in its review, wrote that the stock market experienced a mixed session, with the benchmark index fluctuating between the peak of +484 points and the low of -176 points. The market's performance was influenced by the ongoing IMF review.
The positive movement was primarily fuelled by Mari Petroleum, Bank Alfalah, Maple Leaf Cement, Pakistan Aluminium Beverage Cans and DG Khan Cement, which together contributed 147 points to the index.
Conversely, Fauji Fertiliser, Oil and Gas Development Company (OGDC) and Engro Holdings weighed on the market, pulling the index down by 188 points, Topline said. Arif Habib Limited (AHL) observed that the KSE-100 index continued to trade sideways with further consolidation. A total of 49 shares rose while 47 fell.
The biggest contributors to the index gains were Mari Petroleum (+1.4%), Bank Alfalah (+0.81%) and Maple Leaf Cement (+2.53%). On the contrary, the largest drags included Fauji Fertiliser (-1.15%), Pakistan Petroleum (-1.31%) and OGDC (-0.72%), it said.
In major news, Moody's upgraded Pakistan's banking outlook from stable to positive. "This change reflects the banks' resilient financial performance and improving macroeconomic conditions compared to a year ago," it said. Looking ahead, AHL anticipated a target of 116k in the near term.
KTrade Securities, in its market wrap, said that the PSX witnessed a lacklustre session, where trading was characterised by low volumes and a lack of catalysts to drive growth. The cement sector was a bright spot that performed well and bucked the overall trend. However, fertiliser and oil stocks contributed significantly to the index's decline, it said.
The law and order situation in Balochistan and K-P as well as the IMF review were key factors that could impact market performance in the short term, KTrade added.
JS Global analyst Muhammad Hasan Ather commented that there was a volatile session, where the benchmark index initially gained 484 points before closing down 93 points.
The decline was attributed to profit-taking in key sectors, despite earlier gains driven by oil and gas exploration, oil marketing companies, refinery and power generation stocks, he said. Ather expected the market to remain cautious, with investors closely monitoring macroeconomic developments and the anticipated second IMF tranche of $1 billion.
Overall trading volumes decreased to 299.6 million shares compared with Tuesday's tally of 318.5 million.
Shares of 432 companies were traded. Of these, 159 stocks closed higher, 213 fell and 60 remained unchanged. The value of shares traded during the day was Rs20.3 billion.
Sui Southern Gas Company was the volume leader with trading in 18.3 million shares, falling Rs0.19 to close at Rs36.84. It was followed by At-Tahur Limited with 14.9 million shares, gaining Rs3.54 to close at Rs38.91 and The Bank of Punjab with 14.4 million shares, losing Rs0.07 to close at Rs13.09. During the day, foreign investors bought shares worth Rs582.1 million, the NCCPL reported.
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