PSX slips on super tax worries, US-India trade deal news

Stocks slipped on Friday as investors weighed super tax concerns for high-earning corporates and mulled headlines around a US-India trade deal, while lower global crude prices and a jump in government bill yields kept risk appetite in check.

The Pakistan Stock Exchange's (PSX) benchmark KSE-100 Index traded between a high of 188,036.30, up 204.22 points, or 0.11%, and a low of 184,548.34, down 3,283.74 points, or -1.75%, against the previous close of 187,832.08.

"Stocks staged a massive selloff amid the impact of the super tax on high-earning corporates and the US-India deal," said Ahsan Mehanti, Managing Director and CEO, Arif Habib Commodities. 

"Falling global crude oil prices and a surge in government bond yield in recent SBP [State Bank of Pakistan] auction played a catalyst role in bearish activity at PSX," he added.

The government raised Rs784 billion (realised value) at Wednesday’s market Treasury bills auction, with cut-off yields moving back into double digits across tenors, according to the SBP. 

The one-month cut-off rose 30 bps to 10.1977%, the three-month advanced 30 bps to 10.1983%, the six-month increased 37 bps to 10.3237%, and the 12-month was up 40 bps to 10.3997%. 

The government raised Rs823 billion (face value) against a target of Rs650 billion and maturities of Rs697 billion, with total participation of Rs2.355 trillion.

India’s Trade Minister Piyush Goyal said India and the United States expect to sign a formal trade deal in March, with a joint statement due within four to five days. 

Under the timeline he outlined, Washington would cut duties on Indian exports to 18% from 50%, while India would lower tariffs on US goods and purchase about $500 billion worth of US products over five years, including $70–80 billion of Boeing aircraft. 

He said aircraft orders placed or ready to be placed, including engines and parts, could total about $100 billion, alongside higher purchases of US energy and chips.

"It appears to be an overall correction in the market. But sentiment dampener is a comment from Barrick," added AAH Soomro, an independent investment and economic analyst.

On Wednesday, the KSE-100 gained 931.34 points (0.50%) to close at 187,832.08, up from 186,900.74, after moving between 188,312.21 and 187,018.69.