Massive selling pressure: KSE-100 plummets over 550 points

The Pakistan Stock Exchange (PSX) witnessed massive selling pressure on Thursday as the benchmark KSE-100 Index lost over 550 points over domestic and international developments, while volume and value of shares improved from the previous session.

The day kicked off on a positive note as investors cheered the development regarding Engro Corporation, which notified the exchange of a purchase/buyback of the company's 70 million ordinary shares.

However, the positivity did not stay for too long as the index soon retreated due to uncertainty over domestic politics and the Federal Reserves' decision to hike the policy rate on Wednesday night.

At close, the benchmark KSE-100 Index settled at 41,179.76, registering a loss of 557.86 points or a percentage change of 1.34%.

Across-the-board pressure was witnessed with index-heavy sectors including commercial banks, automobiles, cement, chemicals, and oil and gas exploration companies ending in losses.

Experts attribute the renewed pressure on the stock market to a combination of international and domestic developments.

“It is a result of an increase in political volatility, after ex-prime minister Imran Khan's recent announcement, which generated a lot of uncertainty in the market,” Sana Tawfik, analyst at brokerage house Arif Habib Limited (AHL), told Business Recorder.

Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan on Wednesday said that he will announce the date of dissolution of Punjab and Khyber Pakhtunkhwa assemblies on December 17.

Addressing a press conference in Lahore after meeting the party leadership and other allies, the former premier said that he will make the announcement at PTI’s public gathering at Lahore’s iconic Liberty Chowk.

“Markets would remain would under pressure till December 17,” Tawfik added.

“Moreover, the US Fed Reserve also raised its policy rate due to which markets around the world are under pressure,” she added.

The Federal Reserve raised interest rates by half a percentage point on Wednesday and projected at least an additional 75 basis points of increases in borrowing costs by the end of 2023 as well as a rise in unemployment and a near stalling of economic growth.

The Fed's policy rate, which began the year at a near-zero level, is now in a target range of 4.25% to 4.50%, the highest since late 2007.

A post-market report from Capital Stake said that indices traded in red for most part of the day.

“Analysts linked the downward trend to volatility on the political front and delay in the ninth review of the International Monetary Fund (IMF),” said the report.

In a key development, as per data released by the Pakistan Bureau of Statistics (PBS), Large Scale Manufacturing Index (LSMI) output decreased by 7.75% for October 2022 when compared with the same period last year, and 3.62% when compared with September 2022.

On the economic front, rupee ended up unchanged against the US dollar on Thursday, to close at 224.71 in the inter-bank market.

Sectors driving the benchmark KSE-100 in the red included, banking (178.37 points), oil and gas exploration (104.94 points) and technology and communication (67.18 points).

Volume on the all-share index increased to 245 million from 146.7 million on Wednesday. The value of shares traded increased to Rs7.59 billion from Rs3.91 billion recorded in the previous session.

Bank Alfalah Limited was the volume leader with 41.70 million shares, followed by WorldCall Telecom with 18.58 million shares, and K-Electric Limited with 10.05 million shares

Shares of 330 companies were traded on Thursday, of which 67 registered an increase, 249 recorded a fall, and 14 remained unchanged.