Stocks plumb as political, economic worries deepen

Stocks shed almost 1.5 percent on Monday as political chaos intensified along with a severe foreign exchange crisis in the country, traders said. Pakistan Stock Exchange (PSX) benchmark KSE 100-share Index declined 1.49 percent or by 602.70 points to stand at 39,720.75 points against 40,323.45 points recorded in the last session. Intraday high was 40,355.57 points, while the lowest level of the day was recorded at 39,661.13 points.

Analyst Ahsan Mehanti of Arif Habib Corp said, “Stocks fell across the board on political noise and concerns for ongoing forex crises.”

Speculations ahead of key policy rate announcement on January 23, dismal data on $2 billion remittances in December 2022 falling by 19 percent year-on-year and uncertainty over the outcome of Pak-IMF talks amid political uncertainty played a catalytic role in the bearish close, Mehanti added. KSE-30 index decreased by 250.25 points or 1.68 percent to close at 14,646.08 points compared with 14,896.33 points recorded in the last session.

Traded volume decreased by 68 million shares to 105.542 million shares from 173.264 million shares in the last session. Value dropped to Rs3.203 billion from Rs4.628 billion. Market capital narrowed to Rs6.333 trillion from Rs6.424 trillion previously. Out of 314 companies active in the session, 65 closed in green, 228 in red and 21 remained unchanged.

Muhammad Arbash, an analyst at Topline Securities, said equities closed red where the index settled at 39,720 points (down 1.49 percent). The market opened on a negative note as investors worried about the unstable economic and political conditions, which led to an intraday low of 662 points with low volumes, he added.

Major negative contributors in the trading session were TRG, Pakistan Petroleum Limited (PPL), Oil and Gas Development Company (OGDC), Engro and Systems Limited, which cumulatively dented the index by 230 points.

The highest increase was recorded in the shares of Shahtaj Textile, up Rs5.90 to close at Rs104.90/share, followed by Archroma Pak, up Rs4.92 to close at Rs439.92/share. A significant decline was noted in the shares of Nestle Pakistan, down Rs251 to end at Rs5,399/share, followed by Bata (Pak), down Rs125.02 to end at Rs1,725/share.

Brokerage Arif Habib Ltd said the business week started off with negative sentiments across the board resulting in the index trading in the red territory throughout the trading session due to the prevailing political uproar.

Investors' participation remained sluggish across the board as the index made an intraday low of 662.70 points and closed negative at the end of the trading day. Volumes remained dry across the board.

Sectors contributing to the performance included E&Ps (-132.1 points), technology and communication (-97.1 points), cements (-63.2 points), fertilisers (-57.1 points), and commercial banks (-56.0 points).

WorldCall Telecom remained the volume leader with 8.960 million shares. Its scrip remained unchanged at Rs1.14/share. It was followed by Hascol Petrol with 7.841 million shares that closed lower by 4 paisas to Rs6.58/share.

Other stocks that recorded significant turnover included Lotte Chemical, PPL, OGDC, Pak Refinery, Cnergyico PK, Power Cement, Sui Northern Gas Pipelines and Maple Leaf. Shares’ turnover in the future contracts increased to 39.675 million shares from 37.913 million shares.