Stocks stumble on fears of a tough budget to seek IMF loan

KARACHI: Stocks closed lower on Wednesday as a correction was observed amid fears of a tough federal budget in a bid to seek an IMF loan.

The Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share Index decreased by 681.19 points or 0.90 per cent to 74,836.30 points against 75,517.49 points recorded in the last session. The highest index of the day remained at 75,667.31 points while the lowest level was recorded at 74,760.10 points.

According to analyst Ahsan Mehanti at Arif Habib Corp: “Stocks closed lower on investor fears over the likely tough federal budget FY25, expected next week, to seek new IMF bailout package.”

Per him, political noise, subdued growth, weak FDI data and reports of the unresolved power-sector circular debt reaching Rs5.3 trillion played a big role in the bearish close. The KSE-30 index decreased by 273.31 points or 1.13 per cent to 24,004.42 points against 24,277.73 points.

Traded shares decreased by 38 million shares to 408.073 million shares from 446.071 million shares. The trading value slightly rose to Rs16.500 billion from Rs16.406 billion. Market capital narrowed to Rs10.083 trillion against Rs10.186 trillion. Of 405 companies active in the session, 85 closed in green, 277 in red and 43 remained unchanged.

Naveed Nadeem, an analyst at Topline Securities, said equity market experienced a downturn. The KSE-100 index hit an intraday high of 75,667 points and an intraday low of 74,760 points, ultimately closing the day at 74,836 points, (down 681 points or 0.90 per cent).

The E&P, banking, and fertilizer sectors contributed to the negative trend, with OGDC, PPL, BAHL, FFC, and Engro collectively shedding 323 points. Conversely, SRVI, LCI, and FABL collectively added 65 points.

The highest increase was recorded in PIA Holding Company Limited B-shares, which rose by Rs60.83 to Rs889.25 per share, followed by Service Industries Limited, which increased by Rs43.83 to Rs918.63 per share. A significant decline was noted in Hoechst Pakistan Limited, which fell by Rs113.80 to Rs1,358.70 per share; Hallmark Company Limited followed it, which closed lower by Rs45.27 to Rs534.26 per share.

Brokerage Arif Habib Ltd stated that the PSX showed signs of a potential corrective period as important support levels began to falter. The bias has now shifted towards lower prices, diverging from the highs observed last Friday.

Market analysts suggest that the bulls need a robust up day to counteract the growing risk of further declines. The outlook is particularly cautious with the KSE-100 index hovering around critical support levels. Any movements below 76,200 points will likely be seen as part of a corrective phase, indicating that more downward pressure could follow.

As the market navigates this period of uncertainty, all eyes will be on the performance of key stocks and sectors to gauge the potential for recovery or further decline.K-Electric Ltd remained the volume leader with 38.647 million shares which closed lower by 11 paisas to Rs4.91 per share. WorldCall Telecom followed it with 22.383 million shares, which closed lower by three paisas to Rs1.34 per share.

Other significant turnover stocks included Dewan Motors, Dewan Cement, Faysal Bank, PIA Holding Company, Symmetry Group Ltd, Hum Network, Unity Foods Ltd and Oil & Gas Dev.In the futures market, 317 companies recorded trading, of which 40 increased, 272 decreased and five remained unchanged.