Stocks edge lower on budget concerns, dismal growth data

Stocks closed lower on Thursday amid talks of some new taxes in the forthcoming budget, dismal GDP growth data, and increased concerns over the IMF bailout programme, traders said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed lower by 87.65 points or 0.21 percent to 41,029.68 points against 41,117.33 points recorded in the last session. The highest index of the day remained at 41,219.03 points while the lowest level of the day was recorded at 40,956.88 points.

“Stocks closed lower on economic uncertainty amid stalled IMF bailout programme and dismal data on GDP growth falling to 0.29 percent in FY23,” Ahsan Mehanti, analysts at Arif Habib Corp, said.

He added that an uncertainty over federal budget FY24 announcements, concerns for prospects of an $18 billion penalty over the Iran gas pipeline project, and Finance Minister Ishaq Dar’s hints over the end of the IMF programme had played a catalyst role in the bearish close.

KSE-30 index also decreased by 19.66 points or 0.13 percent to 14,575.69 points compared with 14,595.35 points recorded in the last session. Traded shares rose by 20 million shares to 125.344 million shares from 105.572 million shares. The trading value increased to Rs4.059 billion from Rs2.576 billion. Market capital narrowed to Rs6.214 trillion from Rs6.227 trillion. Out of 324 companies active in the session, 110 closed in green, 184 in red and 30 remained unchanged.

According to Ali Najib, analyst at Topline Securities, said a range-bound session was observed at equities as the benchmark index traded between 262 points range (intraday high +102 and low -160 points).

During the trading hours, TRG, HBL & NML contributed negatively to the index as they cumulatively lost -83 points. On the other side, LUCK, OGDC, HMB & TGL witnessed some buying interest, as they added +52 points to the index.

The highest increase was recorded in Blessed Tex. shares, which rose by Rs27.75 to Rs397.75 per share, followed by Faisal Spinning, which increased by Rs25.17 to Rs375.17 per share. A significant decline was noted in Bata (Pak), which fell by Rs73.67 to Rs1,606.33 per share, followed by Service Ind. Ltd, which decreased by Rs13.32 to Rs246.33 per share.

Brokerage Arif Habib Ltd said a mixed session was recorded at the PSX. “The benchmark KSE-100 index opened in the green, but due to the Pak rupee and US dollar parity, the market had volatile activity and ended the day in the red,” it reported. “Investors are taking a cautious attitude to the rumours about new taxes in the forthcoming budget.”

Volumes remained decent across the board as third-tier equities continued to dominate. Sectors contributing to the performance included technology and communication (-69.3 points), commercial banks (-22.8 points), textile composite (-10.6 points), pharmaceuticals (-8.3 points), and leather & tanneries (-7.0 points).

Gul Ahmed remained the volume leader with 10.735 million shares which closed higher by 32 paisas to Rs22.93 per share. It was followed by Pak Refinery with 8.370 million shares, which closed higher by 33 paisas to Rs14.10 per share.

Other significant turnover stocks included WorldCall Telecom, Globe Residency, Maple Leaf, Fauji Foods Ltd, Hascol Petrol, TRG Pak Ltd, Oil & Gas Dev., and Air Link Commun. Shares’ turnover in the future contracts increased to 183.688 million shares from 135.192 million shares.