Stocks drop over 1,000 points as political deadlock drags on
Highest index of the day remained at 61,173.31 points while the lowest level was recorded at 59,739.47 points
Stock plunged more than 1000 points on Friday, as investors were rattled by the political uncertainty over the formation of a new government and the economic challenges facing the country, dealers said
The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed lower by 1,147.10 points or 1.88 percent to 59,872.96 points against 61,020.06 points recorded in the last session.
The highest index of the day remained at 61,173.31 points while the lowest level was recorded at 59,739.47 points. The KSE-30 index also fell by 382.10 points or 1.87 percent to 20,099.31 points.
Ahsan Mehanti, an analyst at Arif Habib Corp, said stocks fell sharply lower amid dismal data on LSM growth for July- Dec’23 and reports of Pakistan downgrade to the authoritarian regime by Economist Intelligence Unit (EIU).
"Unclarity over coalitions’ power-sharing formula, IMF’s new conditions over the next $1.2 billion tranche under SBA to liberalise imports, and cabinet approvals over the increase in gas prices played a catalytic role in the bearish close."
Traded shares decreased by 31 million shares to 314.247 million shares from 345.126 million shares. The trading value rose to Rs12.243 billion from Rs11.873 billion. Market capital narrowed to Rs8.717 trillion against Rs8.883 trillion. Out of 331 companies active in the session, 77 closed in green, 238 in red and 16 remained unchanged.
Analyst Ali Najib at Topline Securities said equities commenced the day on a negative note, remained "negative for most of the business hours as the benchmark index made an intraday low at 59,740 level (down 1,281 points) and ultimately closed the business hours at 59,873 level (lost 1,147 points; down 1.88 percent)".
“Today’s pessimism goes to continuous uncertainty over the political front with respect to the formation of upcoming coalition set up as political parties are yet to arrive on conclusion in this regard.”
During the day, E&P, power, tech & cement sectors contributed negatively to the index as OGDC, HUBC, PPL, SYS, MARI & LUCK lost 465 points, cumulatively.
The highest increase was recorded in Bhanero Textile Mills Limited, which rose by Rs69.38 to Rs994.38 per share, followed by Hallmark Company Limited, which increased by Rs22.67 to Rs325.45 per share. A significant decline was noted in Rafhan Maize Products Company Limited, which fell by Rs134.35 to Rs8,365.65 per share, followed by Mari Petroleum Company Limited, which closed lower by Rs68.86 to Rs2,198.25 per share.
Brokerage Arif Habib Ltd said the index concluded the week with a close below 60,000 points level, registering a significant 5.14 percent decline week-on-week (WoW). "As the market edges closer to the 59,000 points target set for February, it enters a seasonally weak period," the brokerage said.
In recent developments, the Federal Cabinet approved a weighted average gas price increase of +12.3 percent to PKR 1,533/mmbtu. This decision aligns with the IMF's conditions for the upcoming second review of the Standby Arrangement, indicating continued adherence to IMF directives.
"Protests anticipated over the weekend are likely to exert further pressure on the market in the coming week. The prevailing bias remains tilted to the downside, with resistance expected around the 62,000 points level."
K-Electric Ltd. remained the volume leader with 41.835 million shares which closed lower by 23 paisas to Rs4.10 per share. WorldCall Telecom followed it with 25.778 million shares, which closed lower by 4 paisas to Rs1.21 per share.
Other significant turnover stocks included Oil & Gas Dev., Pak Refinery, P.I.A.C.(A), Pak Petroleum, B.O. Punjab, Engro Fert., Agritech Limited and Silk Bank Ltd. In Future’s Market, 319 companies recorded trading, of which 38 increased, 280 decreased and one remained unchanged.
