Stocks tumble on weak government prospects, energy sector suffers losses

Stocks fell 1.8 percent on Tuesday on an uncertain political outlook, as the investors weighed the prospects of a weak coalition government following a hung parliament in the general elections held last week, the dealers said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index fell by 1,133.78 points or 1.82 percent to close at 61,020.06 points. The index had hit an intraday high of 62,394.25 points earlier in the session. The KSE-30 index also decreased by 473.29 points or 2.26 percent to 20,481.42 points.

“Stocks fell across the board amid political noise as new coalitions emerge for the prime minister slot,” said Ahsan Mehanti, an analyst at Arif Habib Corp. He said default risks amid political instability, policy uncertainty and a hike in gas prices for industries also weighed on the market sentiment.

Traded shares increased by 42 million shares to 345.126 million shares from 303.886 million shares. The trading value dropped to Rs11.873 billion from Rs14.687 billion. Market capital narrowed to Rs8.883 trillion against Rs9.046 trillion. Out of 344 companies active in the session, 85 closed in green, 238 in red and 21 remained unchanged.

Analyst Ali Najib at Topline Securities said equities began the business positively and stayed in the green zone for most of the business hours and the benchmark index made an intraday high at 62,394 points level.

"However the index started to come off sharply after news arrived on different media channels regarding PTI engaging in talks with different parties to form the new government," Najib said. "This development knocked down the market’s positive momentum with a feather. Consequently, the index called the day at 61,020 levels."

During the day, E&P, power, bank & fertilizer sectors contributed negatively to the index as OGDC, PPL, HUBC, UBL & ENGRO lost 438 points, cumulatively.

The highest increase was recorded in Rafhan Maize Products Company Limited, which rose by Rs223.75 to Rs8,500 per share, followed by Philip Morris (Pakistan) Limited, which increased by Rs11.50 to Rs740 per share. A significant decline was noted in Mari Petroleum Company Limited, which fell by Rs54.67 to Rs2,267.11 per share, followed by Mehmood Textile Mills Limited, which closed lower by Rs42.02 to Rs518.28 per share.

Brokerage Arif Habib Ltd said the index experienced a downturn as political tensions continued to rise, contributing to heightened market volatility dominated by news headlines.

“Despite fluctuations in earnings reports, the market continues to face liquidity challenges, with the support remaining at 59,000 points and resistance overhead at 63,000-64,000 points. Moreover, February is once again demonstrating its tendency to be a weak seasonal period for the KSE-100,” it said in a note.

Analysts said the market’s performance remained closely tied to political developments and economic indicators, with investors closely monitoring the situation amid ongoing uncertainties.

K-Electric Ltd. remained the volume leader with 33.326 million shares which closed lower by 14 paisas to Rs4.33 per share. PIAC (A) followed it with 28.606 million shares, which closed higher by 89 paisas to Rs10.61 per share.

Other significant turnover stocks included Media Times Ltd, Hascol Petrol, BOPunjab, WorldCall Telecom, Pak Refinery, Oil & Gas Dev., Dewan Cement and Telecard Limited. In Future’s Market, 319 companies recorded trading, of which 41 increased, 274 decreased and 4 remained unchanged.