Negativity at PSX: KSE-100 plunges over 1% owing to uncertainty

Negative sentiment gripped the Pakistan Stock Exchange (PSX) as the benchmark KSE-100 Index witnessed a fall of over 1% during the trading session on Friday.

Uncertainty over the stalled International Monetary Fund (IMF) programme added downside pressure to the market.

KSE-100 closes nearly flat in volatile session

By the end of the session, the benchmark index closed with a loss of 423.6 points or 1.09% at 38,407.98 level. The market fell over 500 points in intra-day trading before recovering slightly.

Across-the-board pressure was seen as index-heavy sectors including, automobiles, cement, chemical, commercial banks and oil & gas exploration companies traded in the negative.

The KSE-100 Index kicked off the session on a positive note, but sentiments shifted in the second half of the trading session.

Market experts attributed the development to the ongoing uncertainty pertaining to the crucial IMF programme, which remains stalled to date.

“Mutual fund redemptions are also being witnessed at the bourse, which is a major reason behind the decline. This is creating pressure on the market,” Abdullah Umer, a market analyst told Business Recorder.

“Uncertainty pertaining to the IMF programme resumption is also playing on the minds of investors,” he added.

Economic experts and markets have expressed concern over the government’s inability to resume the IMF’s ninth review, as it remains indecisive over fulfilling the lender’s pre-requisites, such as additional revenue commitments, an increase in PDL and GST on petroleum products, and a hike in electricity and gas tariff.

This has created an overall sense of negativity that is being reflected in both the stock and currency markets.

A report from Capital Stake stated that failing to sustain gains made during early hours of the day, the PSX ended last session of the week in negative.

“Indices traded in red for most part of the day, while volumes fell from previous close,” it said.

On the economic front, foreign exchange reserves held by the State Bank of Pakistan (SBP) rose $258 million to $4.6 billion, data released on Thursday showed. This was the first increase in 8 weeks.

Moreover, rupee recorded 23rd straight fall and declined by Re0.52 or 0.23% to close at 229.67.

Sectors painting the benchmark KSE-100 Index red included banking (82.13 points), technology and communication (62.26 points) and cement (58.81 points).

Volume on the all-share index plummeted to 93.5 million from 157.8 million on Thursday. The value of shares traded nearly halved to Rs3.5 billion from Rs6.4 billion recorded in the previous session.

Pakistan Petroleum was the volume leader with 8.3 million shares, followed by WorldCall Telecom with 5.6 million shares, and Ghani Chemical Industries with 5.1 million shares.

Shares of 314 companies were traded on Friday, of which 103 registered an increase, 194 recorded a fall, and 17 remained unchanged.