PSX plunges despite IMF loan approval

Bourse turns bearish, falls 326 points

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KARACHI: The share market ended down on Thursday despite positive outcome of loan approval by IMF for Pakistan. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 34,570 points as against 34,897 points showing a decline of 326 points.

During the session, the investors resorted to profit-booking amid pressure on stocks across the board. After an initial spike, the KSE-100 index maintained its downward trajectory, finishing the day with heavy sell-off. The long awaited IMF funding facility failed to impress investors as concerns of domestic businesses weighed down investor sentiments.

The business community had voiced serious concern over the hike in taxes and tariffs introduced in the Finance Bill 2019, which brought numerous sectors of the economy to a standstill, it said.

All index-heavy sectors fell into the negative territory with cement and exploration and production sectors closing entirely in the red.

Overall, trading volumes decreased to 111.9 million shares compared with Wednesday’s tally of 130.4 million. The value of shares traded during the day was Rs4.4 billion. Shares of 318 companies were traded. At the end of the day, 61 stocks closed higher, 241 declined and 16 remained unchanged.

K-Electric was the volume leader with 8.98 million shares, losing Rs0.05 to close at Rs4.29. It was followed by TRG Pakistan with 8.24 million shares, losing Rs0.71 to close at Rs17.16 and Maple Leaf Cement with 7.6 million shares, losing Rs0.96 to close at Rs24.37. Foreign institutional investors were net buyers of Rs471.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.

At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 325.93 points, or 0.93%, to settle at 34,570.62. Buy the rumor, sell the news’ proved true again today, when yesterday’s signing off of IMF loan Package to Pakistan led the index with positive 400 points earlier today, but soon the selling pressure kicked in and caused the index to plunge by -430 points by the end of session, closing the index with -326 points.

Cement, Steel, Fertilizer contributed to declines, whereas key scrips in banking and Power sector remained positive. Similar to yesterday’s trading activity, Cement and Chemical Sectors led the volumes table with Cement ranking first (22 million) followed by Chemical (14 million). Among scrips, KEL topped the chart with 9M shares, followed by TRG (8 million).

Sectors contributing to the performance include Cement (-73 points), E&P (-63 points), O&GMCs (-50 points), Fertilizer (-32 points) and Pharma (-30 points). Volumes declined from 130 million shares to 112 million shares (-14 percent DoD). Average traded value also declined by 9 percent to reach US$ 27.8 million as against US$ 30.5 million.

Stocks that contributed significantly to the volumes include KEL, TRG, MLCF, LOTCHEM and UNITY, which formed 33 percent of total volumes. Stocks that contributed positively include HUBC (+22 points), HBL (+9 points), ENGRO (+5 points), IGIHL (+4 points) and INDU (+4 points). Stocks that contributed negatively include OGDC (-33 points), LUCK (-33 points), PPL (-24 points), PSO (-20 points) and SNGP (-19 points).

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