KSE-100 loses nearly 1,000 points amid ‘technical correction’

Severe selling pressure was witnessed at the Pakistan Stock Exchange (PSX) as the benchmark KSE-100 Index fell below the 65,000 level with a decrease of nearly 1,000 points on Tuesday with analysts terming it a ‘technical correction’ that was long overdue.

During the trading session, both the volume and value of shares traded declined on a day-to-day basis.

The benchmark index settled at 64,801.70, a decrease of 953.60 points or 1.45%. The index had hit an intra-day low of 64,664.67 earlier in the session.

Sectors such as auto, chemicals, banks, oil & gas as well as refineries – that had seen a bull run lately – were unable to escape the selling spree.

Experts attributed the selling to a much-needed technical correction in the market.

“Technical correction took place today and this was long overdue,” Tahir Abbas, Head of Research at Arif Habib Limited (AHL), told Business Recorder.

The analyst said liquidity and volume in the market remain low due to Ramazan. “However, market activity will improve in the coming days,” he added.

Abbas said talks are expected to commence between the new government and the International Monetary Fund (IMF) after the completion of the ongoing programme in April.

Other analysts said participants were settling their positions after heavy buying in the previous sessions.

Capital Stake, in its report, attributed the bearish trend to investor concerns over the upcoming talks with the IMF.

“Additionally, the persistent rise in inflation dashed hopes for a potential rate cut in the upcoming monetary policy meeting,” added the brokerage house.

Meanwhile, in a key development, Muhammad Aurangzeb, former Chief Executive Officer (CEO) of the country’s largest commercial bank HBL, officially took over responsibility as Finance Minister of Pakistan after taking oath at the Presidency, a statement from the Ministry of Finance said on Monday.

The appointment comes after intense speculation had gripped the country on the choice of finance minister with various names being floated.

Aurangzeb, who was picked over several veterans previously involved in handling the troubled $350 billion economy including four-time finance minister Ishaq Dar, will be in charge of running the financial affairs of the South Asian country at a time when it remains engulfed in a series of economic challenges including rising debt, low growth, and high inflation.

“Investors were keen to see who will be the new Finance Minister as they will be the key person negotiating with the International Monetary Fund (IMF),” said Topline Securities in its report.

“We think Aurangzeb having decades of experience in the financial sector is a better choice along with (Musaddik) Malik who will be looking after the energy sector,” said the brokerage house.

Topline said filling cabinet key ministries with non-elected technocrats “may help in addressing Pakistan’s economic challenges”.

On Monday, the PSX had witnessed some selling pressure as well as its benchmark KSE-100 closed the trading session in the red despite a positive start to settle at 65,755.31, down by 38.45 points or 0.06%.

Globally, Asian stocks nudged higher on Tuesday ahead of the influential US inflation report, while Japanese shares fell and the yen firmed on rising expectations that the Bank of Japan may be ready to exit ultra-easy-monetary policy as early as next week.

Gold was hovering just below its record peak touched last week and the dollar was broadly steady as traders looked for the US consumer price index report later in the day to gauge when the Federal Reserve will likely start its rate cutting cycle.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.20% higher, just shy of the seven-month high it touched on Friday.

Volume on the all-share index decreased to 321.71 million from 548.76 million a session ago.

Meanwhile, the value of shares decreased to Rs10.86 billion from Rs16.60 billion in the previous session.

Hascol Petrol was the volume leader with 29.32 million shares, followed by PIAC(A) with 28.89 million shares, and Cnergyico PK with 25.5 million shares.

Shares of 328 companies were traded on Tuesday, of which 57 registered an increase, 254 recorded a fall, while 17 remained unchanged.