Stocks retreat as election looms, manufacturing slows

Stocks fell on Tuesday as investors were cautious ahead of the upcoming elections and amid modest data on large-scale manufacturing growth, traders said.

The Pakistan Stock Exchange's benchmark KSE 100-share index fell 0.83 percent, or 531.91 points, to close at 63,737.46 points, after touching a low of 63,397.94 points and a high of 64,246.68 points. The KSE-30 index also closed lower by 192.50 points or 0.89 percent to 21,355.92 points.

The market has rallied about 40 percent in the past six months, but the political uncertainty ahead of the elections due by February 8 has dampened the sentiment, traders said. “Stocks closed bearish as investors weigh modest data on LSM growth to 1.59pc year-on-year in November 2023, weak rupee and political noise," said analyst Ahsan Mehanti at Arif Habib Corp.

He below-expected buyback by PSMC, geo-political uncertainty and concerns for power and gas sector circular debt reaching over Rs5.73 trillion played a catalytic role in the bearish close.

Traded shares increased by 25 million shares to 407.543 million shares from 382.012 million shares. The trading value dropped to Rs12.646 billion from Rs14.076 billion. Market capital narrowed to Rs9.331 trillion against Rs9.389 trillion. Out of 338 companies active in the session, 92 closed in green, 219 in red and 27 remained unchanged.

Analyst Ali Najib at Topline Securities said a profit-taking session characterised trading activities, marked by subdued volumes as the benchmark index experienced an intraday low of 871.43 points, ultimately concluding at the 63,737.46 level.

"Negativity loomed the previous day when the delisting committee set PSMC's price at Rs609/share, disappointing market expectations that had anticipated a significantly higher valuation," he added. "Right from the market's opening, PSMC was constrained by the lower lock, witnessing only 11,989 shares traded throughout the day."

Profit booking manifested in the exploration and production (E&P) sector, leading to PPL (-4.14 percent) and OGDC (-2.97 percent) closing in the red trajectory, reversing gains made in the preceding week.

The highest increase was recorded in Nestle Pakistan Limited, which rose by Rs200 to Rs8,200 per share, followed by Philip Morris (Pakistan) Limited, which increased by Rs47.67 to Rs683.26 per share. A significant decline was noted in Rafhan Maize Products Company Limited, which fell by Rs197.50 to Rs9,202.50 per share, followed by Pakistan Services Limited, which closed lower by Rs68 to Rs922 per share.

Muhammad Shuja Qureshi, an analyst at JS Research, said selling pressure continued in the market. "However, selected support was witnessed where PIAA and PTC closed at their upper circuits while E&P stocks were under pressure."

K-Electric Ltd. remained the volume leader with 50.782 million shares which closed lower by 6 paisas to Rs5.79 per share. PTCL followed it with 48.565 million shares, which closed higher by Re1.00 to Rs13.57 per share.

Other significant turnover stocks included WorldCall Telecom, PIAC (A), Pak Int. Bulk, Cnergyico PK, Air Link Commun, Hascol Petrol, Pak Refinery and Pak Petroleum. A total of 312 companies recorded future shares, of which 79 increased, 222 decreased and 11 remained unchanged.