KARACHI:

Bears tightened their grip over the Pakistan Stock Exchange (PSX) in the post-holiday trading session on Wednesday, where the KSE-100 index lost around 680 points. In the morning, trading began with a spike but soon the index dipped due to political uncertainty and the lack of positive cues.

Investor sentiment took a hit despite some midday recovery.

Furthermore, the rollover week also took its toll on the KSE-100 index.

Bearish activity intensified ahead of the presentation of the federal budget for fiscal year 2024-25, with the market expecting the government to take a tough line in the backdrop of a new International Monetary Fund (IMF) loan programme.

Resultantly, the index plunged to the intra-day low of 74,760.10 points after midday.

Exploration and production (E&P), banking and fertiliser sectors led the bourse’s downward trend. The index closed in the red below the 75,000 mark.

“Stocks closed lower on investor fears over a likely tough federal budget for FY25 to seek a new IMF bailout package,” remarked Ahsan Mehanti, MD of Arif Habib Corp.

“Political noise, subdued growth, thin foreign direct investment (FDI) and reports of the unresolved power sector circular debt reaching Rs5.3 trillion played the role of catalysts in bearish close at the PSX.” At the close of trading, the benchmark KSE-100 index registered a sharp decline of 681.19 points, or 0.9%, and settled at 74,836.30.

Topline Securities, in its report, said that Pakistan’s equity market experienced a downturn, though trading was robust. E&P, banking and fertiliser sectors contributed to the negative trend, with Oil and Gas Development Company, Pakistan Petroleum, Bank AL Habib, Fauji Fertiliser Company and Engro Corporation collectively shedding 323 points.

Conversely, Service Industries, Lucky Core Industries and Faysal Bank collectively added 65 points, Topline added. Arif Habib Limited (AHL), in its commentary, said “important levels are starting to give way and the risk of a corrective period setting in has increased.”

“Bias now shifts to lower prices against Friday’s highs,” it said, adding that bulls needed a strong day to mitigate the increased downside risks “the market is currently exposed to.”

Below 76,200 moves would be viewed as corrective with more to come on the downside, AHL noted. JS Global analyst Mohammed Waqar Iqbal said the market opened on a negative note, feeling the pressure due to the rollover week.

“Going forward, the market is anticipated to maintain its accumulation phase,” the analyst added.

Overall trading volumes decreased to 408.1 million shares against Monday’s tally of 446.1 million. The value of shares traded during the day was Rs16.5 billion. Shares of 405 companies were traded. Of these, 85 stocks closed higher, 277 dropped and 43 remained unchanged.

K-Electric was the volume leader with trading in 38.6 million shares, losing Rs0.11 to close at Rs4.91.

It was followed by WorldCall Telecom with 22.4 million shares, losing Rs0.03 to close at Rs1.34 and Dewan Motors with 19.4 million shares, losing Rs3.34 to close at Rs41.42. Foreign investors were net buyers of shares worth Rs514 million, according to the NCCPL.