Tuesday May 24 2022

Political upheaval: KSE-100 slumps to lowest level since Dec 2020

An investor looking at the stock board at the Pakistan Stock Exchange (PSX). — AFP/File
An investor looking at the stock board at the Pakistan Stock Exchange (PSX). — AFP/File

  • KSE-100 index sheds nearly 500 points to close below 42,000-mark.
  • Political crisis, uncertainty on economic outlook take a toll on PSX.
  • Investors opt to remain on the sideline.

KARACHI: A deepening political crisis, along with uncertainty on the economic outlook combined, took a toll on the Pakistan Stock Exchange (PSX), as the benchmark KSE-100 index lost nearly 500 points or 1.15% on Monday, to close below the 42,000-barrier for the first since December 2020.

In the backdrop of an unsatisfactory economic scenario, coupled with a deepening political crisis, the index fell below the 42,000-point mark. Economic uncertainty following the hike in a benchmark interest rate and the delay in the outcome of talks with the International Monetary Fund (IMF) impacted the investment climate.

On the political front, the investors kept a close eye on the developments regarding PTI’s ‘Azadi March’ scheduled to begin tomorrow (May 25).

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Moreover, the depreciation of the rupee against the US dollar and depleting foreign exchange reserves, as reported by the State Bank of Pakistan, coupled with a gloomy economic outlook aided the bearish sentiment.

At close, the benchmark KSE-100 index closed at 41,950.32 after losing 489.93 points or 1.15%.

Benchmark KSE-100 index intra-day trading curve. — PSX data portal
Benchmark KSE-100 index intra-day trading curve. — PSX data portal

A report from Arif Habib Limited noted that the benchmark KSE-100 index opened negative and witnessed a volatile session throughout the day due to concerns over foreign exchange reserves and a rate hike in the monetary policy statement which pulled off confidence among investors.

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“The market continued to remain under pressure as investors opted to remain on the sideline until further clarity on the political as well as economic front,” it stated.

The brokerage house noted that the volumes remained dry throughout the mainboard whereas, healthy volumes were observed in the third-tier stocks.

Sectors contributing to the performance included banks (-108.8 points), technology (-74.8 points), cement (-72.1 points), fertiliser (-56.2 points) and chemical (-25 points).

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Shares of 318 companies were traded during the session. At the close of trading, 94 scrips closed in the green, 208 in the red, and 16 remained unchanged.

Overall trading volumes rose to 169.70 million shares compared with Monday's tally of 118.98 million. The value of shares traded during the day was Rs5.46 billion.

Pakistan Refinery was the volume leader with 15.73 million shares traded, gaining Rs0.46 to close at Rs15.74. It was followed by Silk Bank with 14.66 million shares traded, gaining Rs0.07 to close at Rs1.39 and TPL Properties with 10.60 million shares traded, gaining Rs0.38 to close at Rs15.49.