Political noise reverses intraday gains from rupee devaluation

Published
7

The Pakistan Stock Exchange (PSX) on Wednesday saw investor sentiment seesaw considerably, with the benchmark KSE-100 index surging to a day's high of 46,358 points from a low of 45,153 962, before settling nearly flat with a gain of 19 points at market close.

The PSX had only two days earlier experienced a bloodbath, with the benchmark KSE-100 Index shedding 1,900 points on reports that the Supreme Court-appointed JIT's proceedings were not going in favour of the first family.

The JIT has to submit its findings before the apex court on July 10, which will then decide if the prime minister can be sent packing for misleading the nation on his personal wealth.

Trading had commenced Wednesday on a negative note, with the benchmark shedding almost 242 points to touch 45,152.63 points as the day's low within the first few minutes. However, it rebounded shortly after and continued upward till it touched 46,356.78 points — the day's high.

The index later experienced considerable selling pressure and settled at 45,413 points by close of trading.

Trading activity was led by the banking sector, with 31.5 million shares traded.

Senior analyst and head of research at Elixir Securities Pakistan, Hamad Aslam had earlier told Dawn.com that the initial rally was driven mainly by sectors affected by a depreciation in the rupee.

The rupee's value against the dollar had fallen by almost Rs3, which had resulted in activity in the oil and gas, textile and other relevant sectors, Aslam said. He added that the rally in these sectors had spilled over and buttressed overall sentiment in the capital market in the first half of trading.

Talking about the political scenario and its impacts on the capital market, he said that "hot money" or individual investors were still preferring to remain on the sidelines. However, he added, that those investing in mutual funds were still buying in selected chips.

A total of 358 companies were traded on the exchange, with 157 advancing, 186 declining and 15 remaining unchanged.

Overall volumes touched 204m shares, worth Rs12.5 billion.

Volumes were led by:

  1. TRG Pak: 17.43m shares traded (-4.97pc)

  2. Bank of Punjab: 16.3m shares traded (+0.27pc)

  3. Engro Polymer: 8.8m shares traded (-1.03pc)

  4. WorldCall Telecom: 8.8m shares traded (-4.00pc)

  5. Ittefaq Iron Industries: 7.7m shares traded (+1.84pc)

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