KARACHI: Stocks fell to their lowest in 30 months on Tuesday, with political uncertainty and interest rate panic selling hitting almost every counter and leaving investors nowhere to hide.
The main index tumbled more than three percent as worsening inflation expectations kept intact worries that the central bank’s aggressive rate hike path could further slow down the already fragile economy.
Brokerage Arif Habib Ltd said the PSX witnessed a bloodbath. “The benchmark index opened in the green zone, but prevailing economic instability and political uncertainty plunged the index down to an intraday low of 1,432.94 points and concluded in the red zone,” the brokerage said in a post market report.
“Whispers of delay in the IMF programme along with continuous political upheaval, caused investors to lose confidence as they squared up their positions today.” The Pakistan Stock Exchange (PSX) benchmark KSE 100-share Index plunged 3.47 percent or 1,378.54 points to close at 38,342.21 points. Intraday high was 39,942.51 points, while the lowest level of the day was recorded at 38,288.59 points. The KSE-30 index also fell by 565.61 points or 3.86 percent to close at 14,080.47 points.
Volumes increased by 100 million shares to 205.906 million shares from 105.542 million shares, whereas value increased to Rs6.710 billion from Rs3.203 billion. Market capital plunged to Rs6.134 trillion from Rs6.333 trillion. Out of 340 companies active in the session, 34 closed in green, 281 in red and 25 remained unchanged.
Brokerage Topline Securities said “a selling spree grabbed the market completely and led the benchmark index to settle at 38,342 (-1,379 points; down 3.47 percent).”
It attributed the bearish momentum to the “street expectation of massive hikes in interest rates (150-200 points) in the upcoming monetary policy meetin,” scheduled on January 23, 2023.
During the day, Systems Limited, Pakistan Petroleum, Lucky Cement, Oil and Gas Development Company and Engro lost 465 points, cumulatively. On the flip side, Pakistan Servicew, Nestle and EFU General Insurance saw some buying interest as they added 69 points collectively.
The highest increase was recorded in the shares of Nestle Pakistan, up Rs196 to close at Rs5,595/share, followed by Pak Services, up Rs104 to close at Rs2,149/share. A significant decline was noted in the shares of Bhanero Tex, down Rs76.80 to end at Rs948.20/share, followed by Pak Tobacco, down Rs69 to end at Rs851/share.
Analyst Ahsan Mehanti at Arif Habib Ltd said stocks fell across the board on uncertainty over the SBP policy announcement due next week and investor concerns over ongoing forex crises.
“Rupee instability, dismal data on LSM growth falling by 5.5 percent year-on-year in November 2022 and uncertainty over the outcome of Pak-IMF talks on programme conditions amid political uncertainty played a catalytic role in the bearish close.”
Sectors contributing to the performance included E&Ps (-240.40 points), technology and communication (-222.8 points), commercial banks (-199.0 points), cements (-164.9 points), and fertilisers (-138.1 points).
K-Electric Ltd. remained the volume leader with 29.912 million shares. Its scrip fell by 20 paisas to stand at Rs2.07/share. It was followed by WorldCall Telecom with 14.479 million shares that closed lower by 4 paisas to Rs1.10/share.
Other stocks that recorded significant turnover included Sui Northern Gas Pipelines, PPL, Cnergyico PK, Hascol Petrol, OGDC, Maple Leaf, TRG Pak Ltd and Al Shaheer (R). Shares turnover in the future contracts increased to 53.382 million shares from 39.675 million shares.