Stocks closed lower in a volatile trade on Tuesday, snapping a two-day rally, as investors were spooked by a surge in inflation that raised the prospects of further delay in monetary easing, dealers said..
The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index fell 0.48 percent of 312.18 points to close at 64,349.60 points, after touching a high of 65,333.70 points earlier in the session.The KSE-30 index also ended lower by 0.23 percent or 49.20 points to close at 21,566.93 points.
The data released by the Pakistan Bureau of Statistics showed that the consumer price index (CPI) rose 29.7 percent year-on-year in December driven by higher food and energy prices. Analyst Ahsan Mehanti at Arif Habib Corp the market was taken aback by inflation numbers, which increased the chances of status quo in interest rate regime.
The State Bank of Pakistan (SBP) has keep its policy rate unchanged at record 22 since July to curb inflationary pressures.
Mehanti said the market was also weighed down by a slump in global equities, uncertainty ahead of the general elections due in February, and concerns over the financial health of state-owned enterprises (SOEs).
Traded shares increased by 46 million shares to 671.665 million shares from 625.147 million shares. The trading value increased to Rs24.451 billion from Rs18.525 billion. Market capital narrowed to Rs9.292 trillion against Rs9.343 trillion. Out of 378 companies active in the session, 105 closed in green, 252 in red and 21 remained unchanged.
“Throughout the trading day, the index demonstrated volatility within a range of 1,120 points, reaching an intraday high of 65,333.70 (+671.92) and a low of 64,213.63 (-448.16) points,” said analyst Naveed Nadeem at brokerage Topline Securities.
"Adverse movements during the trading hours were observed in HUBC, MARI, SYS, ENGRO, and LUCK, collectively incurring a loss of 176 points. Conversely, stocks like PPL, OGDC, and MEBL contributed to a combined gain of 112 points."
The highest increase was recorded in Sapphire Textile Mills Limited, which rose by Rs86.76 to Rs1,569.68 per share, followed by Hoechst Pakistan Limited, which increased by Rs31.53 to Rs1,320 per share. A significant decline was noted in Pakistan Tobacco Company Limited, which fell by Rs58.47 to Rs1,072.11 per share, followed by Mari Petroleum Company Limited, which closed lower by Rs47.11 to Rs2,100.19 per share.
Brokerage Arif Habib Ltd said the market faced an early session challenge, testing the 65,000 points level. "However, the December CPI figures surprised the market by coming in hotter than expected at +29.66 percent, surpassing estimates of +29.05 percent," it added.
"In the face of these dynamics, support levels remain robust at 63,000 points level, reinforcing the market's stability. This support, above which the market rests, positions the 67,000 points level as a plausible upside target. This statement encapsulates the market's recent performance, incorporating key indicators and outlining potential trajectories."
K-Electric Ltd. remained the volume leader with 79.854 million shares which closed lower by 14 paisas to Rs5.30 per share. WorldCall Telecom followed it with 46.483 million shares, which closed lower by 4 paisas to Rs1.53 per share.
Other significant turnover stocks included B.O. Punjab, Pak Petroleum, Fauji Cement, P.T.C.L., Cnergyico PK, Oil & Gas Dev., Fauji Foods Ltd and Pak Elektron.
A total of 312 companies recorded future shares, of which 69 increased, 240 decreased and 3 remained unchanged.