Bears extended their control over the Pakistan Stock Exchange (PSX) on Thursday as the KSE-100 index fell over 350 points after Pakistan launched retaliatory strikes in Iranian border areas, escalating regional tensions.
Widespread pessimism and negative investor sentiment gripped the market as soon as trading began and it quickly touched the intra-day low at 62,528.55 points owing to geopolitical concerns. Tensions between Pakistan and Iran escalated when Pakistan launched “precision strikes” on terrorist hideouts inside Iran following Tehran’s unprovoked violation of Pakistan’s airspace a day ago.
Stocks remained under pressure throughout the day with across-the-board selling. Gloomy sentiment kept bulls at bay as the KSE-100 index locked the day in the red near the 63,000-point mark. “Stocks closed bearish on investor fears over escalation of Pak-Iran missile strikes and diplomatic row,” said Arif Habib Corp MD Ahsan Mehanti.
Strong data showing foreign direct investment of $863 million, up 35% year-on-year, for Jul-Dec 2023, UAE’s rollover of $2 billion in deposits for a year and $397 million worth of current account surplus in December provided late-session support, he said. “Political noise and ongoing geopolitical uncertainty played the role of catalysts in bearish close of the market.” At close, the benchmark KSE-100 index recorded a decrease of 364.93 points, or 0.57%, and settled at 63,202.40.
Topline Securities, in its report, stated that the equity market experienced a negative trend, with sellers entering the market. “The aforementioned momentum was due to the escalating geopolitical tensions following Pakistan’s retaliation against Iran’s attack,” it said.
As a result, Millat Tractors, Oil and Gas Development Company, Hub Power, Lucky Cement and Pakistan Petroleum collectively contributed to a decline of 187 points from the index, Topline added. Arif Habib Limited (AHL), in its review, stated “the decline into 63,000 found buyers despite retaliatory strikes by Pakistan”.
Read PSX witnesses sharp dip amid Pak-Iran escalation
“For the upside to resume, the 63,000 level needs to be held and 64,000 should be regained,” it said, adding that the KSE-100 was 2.2% down week-on-week while going into Friday’s session.
JS Global analyst Muhammad Shuja Qureshi noted that the KSE-100 index lost 365 points amid intensified selling pressure.
Investors remained jittery due to the geopolitical situation. While selling was across the board, some stocks recovered to close in the green.
“Heading into the weekend, investors are advised to stay cautious and wait for dips to accumulate value stocks,” he said.
Overall trading volumes increased to 445.8 million shares against Wednesday’s tally of 421.3 million. The value of shares traded during the day was Rs14.2 billion.
Shares of 345 companies were traded. Of these, 96 stocks closed higher, 227 dropped and 22 remained unchanged.
K-Electric was the volume leader with trading in 59.7 million shares, losing Rs0.12 to close at Rs5.47. It was followed by Pakistan International Airlines Corp with 40.4 million shares, gaining Rs1 to close at Rs11.56 and WorldCall Telecom with 35.4 million shares, losing Rs0.03 to close at Rs1.30. Foreign investors were net buyers of shares worth Rs5.6 million, according to the NCCPL.
Published in The Express Tribune, January 19th, 2024.
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