The Pakistan Stock Exchange (PSX) experienced significant selling pressure on Monday, resulting in the benchmark KSE-100 index dropping by 466 points. Despite starting the session on a positive note and hitting an intra-day high of 76,187.45, the index quickly reversed course due to a wave of selling, pushing it into negative territory.
The KSE-100 index initially showed strength, driven by early buying interest. However, this momentum was short-lived as selling pressure emerged, particularly in key sectors such as cement, chemicals, commercial banks, fertilizer, oil and gas exploration companies, oil marketing companies (OMCs), and power generation. The index briefly attempted a recovery but ultimately could not sustain the gains, closing at 75,517.49, down by 465.55 points or 0.61%.
Index-heavy stocks, including OGDC, PPL, PSO, SNGPL, and NBP, saw notable declines. Market experts attributed this negativity to the uncertainty surrounding government measures in the upcoming budget. Arif Habib Limited (AHL) highlighted in their report that the anticipation of the FY25 budget announcement on June 7, 2024, is contributing to market apprehension. AHL noted, “It is strongly believed that fiscal discipline will take precedence over populist spending. The upcoming budget, likely to be in line with IMF demands, may lack significant relief measures for the public. It is expected that the budget will focus on broadening the tax base to meet revenue targets.”
Topline Securities observed that investors opted to trim their stock positions near the 76k level, leading the market to settle below this threshold despite an intra-day high of 76,188. The brokerage noted, “A relatively lackluster momentum has been witnessed during business hours in the backdrop of budgetary concerns and mixed IMF vibes.”
In contrast to Monday’s decline, the previous week saw a positive trend at the PSX, driven by robust buying from both local and foreign investors along with institutional support. The benchmark KSE-100 index surged by 640.69 points on a week-on-week basis, closing at a record high of 75,983.04 points.
Globally, Asian shares edged higher on Monday as investors anticipated a busy week of economic data, culminating in a crucial US inflation report. This report could potentially influence future interest rate cuts by the Federal Reserve, though such cuts are not expected imminently. The MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.4%, recovering slightly from a 1.5% decline the previous week.
The Pakistani rupee experienced a marginal decline against the US dollar, depreciating by 0.03% in the inter-bank market on Monday. The local unit closed at 278.3, a fall of Re0.09 against the greenback, according to the State Bank of Pakistan.
Trading volume on the all-share index decreased significantly to 446.07 million from 609.85 million in the previous session. The value of traded shares also fell, dropping to Rs16.40 billion from Rs23.58 billion. K-Electric Ltd emerged as the volume leader with 55.6 million shares traded, followed by Symmetry Group Ltd with 40.66 million shares, and WorldCall Telecom with 29.46 million shares.
A total of 406 companies’ shares were traded on Monday. Among them, 123 registered an increase, 231 recorded a fall, and 52 remained unchanged. This breadth indicates a widespread selling pressure across various sectors.
