KARACHI: The Pakistan Stock Exchange (PSX) saw a sharp decline on Friday, with the benchmark KSE-100 index falling over 1,700 points, primarily attributed to political instability.
“The KSE-100 index largely remained under pressure during the trading session, which can be attributed to political noise as the government has indicated resistance against the Supreme Court order in favour of PTI’s claim to reserved seats in the assemblies,” the brokerage house Topline Securities said.
Ahsan Mehanti of Arif Habib Corporation echoed this sentiment, highlighting the growing political uncertainty. He said stocks plunged due to rising political uncertainty amid concerns over the outcome of the Supreme Court’s reserved seat verdict limiting government constitutional powers.
“Over-leveraging, institutional profit-taking in overbought scrips and concerns over economic uncertainty amid political noise played a catalyst role in bearish close,” he said in a brief note.
Analysts say market remains under pressure as govt resists SC’s July 12 order
According to the PSX data, the KSE-100 index lost 1,721.97 points, or 2.1 per cent, on Friday, closing at 80,117.89 compared to the previous close of 81,839.86.
Major contributors to the index’s decline included Hub Power Company Ltd, Fauji Fertiliser Company Ltd, Habib Bank Ltd, Pakistan Petroleum Ltd, and United Bank Ltd, collectively dragging the index down by 717 points.
The trading volume for the day stood at 478 million shares, with a total value of Rs27.8 billion. Waves Home Appliances Ltd led the day’s trading with 36.9m shares, followed by Fauji Fertiliser Bin Qasim Ltd (30.7m), Pak Elektron Ltd (24.8m), and WorldCall Telecom Ltd (20.1m).
Despite the steep drop on Friday, the KSE-100 index posted a 0.22pc gain on a week-on-week basis. The week began strongly, with the index reaching a record high of 81,840 points following Pakistan’s successful negotiation with the IMF, securing a new $7bn facility. However, profit-taking was observed in the final trading session of the week.
Additional developments during the week included the Large-Scale Manufacturing (LSM) Index for May 2024, showing a 7.3pc year-on-year growth and a 7.5pc month-on-month increase, leading to a 1pc annual rise for the 11 months of FY24.
Advance trade numbers for June 2024 revealed exports at $2.6bn (up 9pc year-on-year, down 10pc month-on-month) and imports at $4.98bn (up 19pc year-on-year and 1pc month-on-month). The current account for June 2024 posted a deficit of $329m, bringing the FY24 current account deficit to $681m.
The average daily trading volume and value for the week were 464m shares and Rs26.8bn, respectively.
Published in Dawn, July 20th, 2024
