Stocks struggle for direction as political deadlock and IMF woes persist

Stocks closed little changed on Tuesday after a volatile session, as investors remained cautious amid political deadlock following a hung parliament in last week's general elections.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index edged up 0.01 percent or 4.49 points to close at 60,464.24 points, after touching a high of 61,237.51 points and a low of 60,420.84 points. The KSE-30 index fell by 49.26 points or 0.24 percent to 20,297.59 points.

Analyst Ahsan Mehanti at Arif Habib Corp said The market ended falat as investors were cautious amid Fitch warnings over IMF program disruptions due to political instability and weak current account data for January.

He added that Barclay's report that Pakistan was unlikely to default on its Eurobonds and that a government led by former prime minister Nawaz Sharif would be less disruptive, supported the market.

Traded shares increased by 103 million shares to 364.443 million shares from 261.799 million shares. The trading value rose to Rs10.928 billion from Rs9.907 billion. Market capital narrowed to Rs8.792 trillion against Rs8.804 trillion. Of 349 companies active in the session, 174 closed in green, 155 in red and 20 remained unchanged.

Analyst Maaz Mulla at Topline Securities said the benchmark index opened on a positive note and the it made an intraday high of 777.77 points, however, the index couldn’t sustain the positivity and came down to close marginally up. "The market sentiment soured amidst enduring political gridlock hampering the formation of the federal government and an absence of favourable catalysts."

In the pharmaceutical domain, a surge ensued following news of the ministry's green light for deregulating the prices of non-essential medications. GLAXO, SEARL, CPHL, and AGP, soared by 7.50 percent, each hitting the upper circuit.

The highest increase was recorded in Pakistan Tobacco Company Limited, which rose by Rs49.16 to Rs1,030 per share, followed by Ismail Industries Limited, which increased by Rs45 to Rs1,200 per share. A significant decline was noted in Unilever Pakistan Foods Limited, which fell by Rs490 to Rs21,800 per share, followed by Sapphire Textile Mills Limited, which closed lower by Rs124 to Rs1,600 per share.

Brokerage Arif Habib Ltd stated that following Monday's gains, the benchmark index struggled to maintain momentum, encountering resistance as indicated by the intraday high of 61,237, significantly below the near-term resistance level of 62,000 points level.

Notable contributors to index gains included HUBC (+1.99 percent), SYS (+2.28 percent), and PSO (+3.65 percent), whereas OGDC (-2.18 percent), PPL (-2.06 percent), and MARI (-2.03 percent) emerged as the largest downside contributors.

The market continues to face downward pressure while trading below the 62,000 mark, with 59,000 serving as the current draw on liquidity.

Bank of Punjab remained the volume leader with 117.022 million shares which closed higher by 25 paisas to Rs6.27 per share. PIAC (A) followed it with 19.289 million shares, which closed higher by 4 paisas to Rs11.10 per share.

Other significant turnover stocks included K-Electric Ltd., WorldCall Telecom, Pak Refinery, Unity Foods Ltd, Oil & Gas Dev., Pak Petroleum, Dewan Motors and Pak Petroleum.

In Future’s Market, 347 companies recorded trading, of which 168 increased, 175 decreased and 4 remained unchanged.