Stocks tumble on weak economic signals

KARACHI:

Bears took control of Pakistan’s stock market on Tuesday as the benchmark KSE-100 was hit hard by the weakening macroeconomic environment in the country.

Investors did not find any positive signals amid several negative reports and as a result the KSE-100 index plunged below 47,000 points.

Speculation over the delay of the International Monetary Fund (IMF) loan tranche to Pakistan and growing inflationary concerns have marred the business atmosphere.

The tumble of the rupee against the greenback in the interbank market, together with soaring global coal prices and outflows of foreign funds, made market participants skeptical, who opted for profit taking.

The session started on a low note as investors shed their holdings, causing the KSE-100 index to drop steadily. A brief buying period emerged around noon, but the market was unable to maintain it.

Later in the day, the index remained limited to a range and traded with minor highs and lows.

At the close, the benchmark KSE-100 fell 715.13 points, or 1.52%, to stand at 46,399.91.

Arif Habib Limited, in its report, said a “bloodbath” had been observed on the Pakistani stock exchange due to the further weakening of the Pakistani rupee against the US dollar, concerns about inflation and the resumption of sales abroad.

The market opened on a dark note after the announcement in the morning that the relaunch of the $ 6 billion stalled IMF program depended on the approval of the fund’s two departments before forwarding it to the Board of Directors. administration.

The textiles sector continued to remain under pressure for a second consecutive session amid concerns over the end of the subsidized gas supply.

Institutional activity remained on the selling side due to buyouts by the mutual fund industry.

Inventories were building up in the banking sector, with Kibor rates rising sharply in the past month, where the spread between the six-month Kibor and the policy rate peaked at 162 basis points, against 50 basis points on average.

In the last hour of trading, massive sell-offs were seen across the board mainly because investors took a cautious approach.

Sectors contributing to performance are commercial banks (-123 points), cement (-102 points), technology (-79 points), exploration and production (-63 points) and electricity (- 46 points).

JS Global analyst Waqar Iqbal said the KSE-100 index has moved closer to the red zone since the start of the trading session due to the uncertainty surrounding IMF talks, the rising gas prices for the industrial sector, disagreement between the government and inflationary concerns.

All these reasons led the index to an intraday low of 46,307 (-808 points).

“A cautious approach is recommended as the market is likely to closely follow the upcoming MPS (Monetary Policy Statement) announcement, the weekly inflation reading, developments regarding the IMF program and the MSCI rebalancing (Morgan Stanley Capital International) this month, ”the analyst said.

Overall trading volume rose to 434.7 million shares, from 364.9 million on Monday. The value of the shares traded during the day was Rs 14.3 billion.

The shares of 359 companies were traded. At the end of the day, 48 stocks closed higher, 296 were lower and 15 were left unchanged.

Telecard Limited XB was the volume leader with 33.5 million shares, losing Rs0.02 to close at Rs19. It was followed by Fauji Foods (R) with 28.8 million shares, losing Re1 to close at Rs3.28 and First National Equities with 25.4 million shares, gaining Re1 to close at Rs11.04.

Foreign institutional investors were net sellers of shares worth Rs 121.04 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.


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