After over 700-point fall, KSE-100 recovers to end marginally negative

The Pakistan Stock Exchange (PSX) saw decent recovery after stocks opened on massive selling pressure on Monday, with the KSE-100 ending only marginally negative.

Negative investor sentiment, arising due to ongoing flash floods in the country coupled with anxiety over the International Monetary Fund (IMF) board meeting, affected trading activity at the start of the session.

After dropping to intra-day low of over 750 points, the market recovered to close 87.17 points or 0.2% down at 42,504.34 level.

However, the KSE-100 index posted a massive recovery towards the latter part of the session. A fresh buying spell in the final hour aided the index in erasing majority of the losses.

KSE-100 finishes below 43,000 after 441-point decrease

Automobile, chemical and banking sectors closed mostly in the red while cement scrips outshined and attracted modest buying. Moreover, oil sector stocks closed on a mixed note.

“Flood situation dented market sentiments (in the first half),” Sana Tawfik, vice-president of research and a senior analyst at Arif Habib Limited (AHL), told Business Recorder.

The analyst informed that the banking sector would be the hardest hit, as its agriculture-based loans would be impacted due to the floods.

JS Global, a brokerage house in its report released on Friday, had also warned that the ongoing flash floods in Pakistan could trigger losses to the tune of billions for the country, led by an increase in imports and export slowdown and higher inflation.

"While too early to accurately quantify, our preliminary estimates suggest that repercussions may include more than $4 billion, higher-than-estimated imports in FY23, and a possible slowdown in exports from the absence of cotton and partially rice,” said the report.

Similar sentiments were expressed by Tawfik.

“Inflation is expected to rise, while GDP growth especially from the agri sector is expected to remain subdued. This would compel the country to import more, which would result in a jump in current account deficit,” she said.

“However, the announcement from the IMF regarding the disbursement of funds for Pakistan could improve sentiment,” added Tawfik.

IMF executive board will meet on Monday (today) to take up Pakistan’s programme review.

A report from Capital Stake stated that PSX ended a volatile session on Monday flat.

“Indices traded in red all day long whereas, volumes decreased form last close,” it said. “As per analysts, investors adopted a cautious approach due to the ongoing flooding situation in the country and ahead of the IMF meeting today.”

On the economic front, rupee closed the day with a depreciation of Rs1.25 or 0.57% against the US Dollar at Rs221.92 in the inter-bank markets.

Sixth successive loss: rupee's decline continues against US dollar

Sectors dragging the benchmark KSE-100 lower included oil and gas exploration sector (30.27 points), food and personal care sector (21.99 points) and automobile sector (18.27 points).

Volume on the all-share index dropped to 229.2 million from 265.7 million on Friday. On the other hand, the value of shares traded declined to Rs7.28 billion from Rs9.03 billion recorded in the previous session.

WorldCall Telecom Limited was the volume leader with 23.8 million shares, followed by K-Electric with 15.8 million shares and Cnergyico PK with 12.2 million shares.

Shares of 337 companies were traded on Monday, of which 115 registered an increase, 197 recorded a fall, and 27 remained unchanged.