KSE-100 down 0.81% as profit-taking, rumours dominate session

It was a day of rumours and unconfirmed reports at the Pakistan Stock Exchange (PSX) with index-heavy OGDC and PPL taking a battering after rising in the early part of the session, with the benchmark KSE-100 Index losing over 500 points on Thursday.

At close, the benchmark index settled at 64,298.00, a fall of 524.43 points or 0.81%.

Earlier, the KSE-100 hit an intra-day high of 65,213.61 with reports around the circular debt management plan that has been on the minds of investors for weeks.

The selling pressure in OGDC and PPL was also accompanied by profit-taking in other sectors after the KSE-100 showed growth over the last few sessions.

At close on Wednesday, positive momentum had prevailed at the bourse as its benchmark KSE-100 index closed at 64,822.43, up by 368.21 points or 0.57%.

Meanwhile, Caretaker Prime Minister Anwaar-ul-Haq Kakar has directed the Ministry of Energy to prepare and submit a comprehensive and sustainable plan after consultation with the Finance Ministry to reduce the circular debt of power and gas sectors.

The caretaker prime minister directed this during a review meeting he presided over on the action plan to reduce the circular debt in the energy sector.

Additionally, hopes of a rate cut in the upcoming Monetary Policy Committee (MPC) meeting on Monday were renewed after the cut-off yield on short-term government securities surprisingly declined up to 62 basis points in the auction held on Wednesday.

Despite the decline, analysts Business Recorder reached out to on Thursday said they expect status quo in the MPC meeting.

“Apart from profit-taking, reports suggesting that the government’s ‘circular debt’ plan would require the International Monetary Fund (IMF) nod have irked investors as they feel that the plan would face further delays,” Sana Tawfik told Business Recorder.

“This has created negative sentiment among the energy sector stocks.

“Moreover, there are also rumours regarding a policy rate cut in the upcoming Monetary Policy Committee (MPC) on Monday,” she added.

Globally, Shanghai and Hong Kong stocks built on their recent rally Thursday as traders awaited fresh pledges of stimulus from Chinese officials a day after they announced a measure to boost bank lending, though other Asia markets fluctuated.

Another record close for the S&P 500 on Wall Street provided a positive lead for investors, while a string of data including on US economic growth and jobs could give some idea about the Federal Reserve’s plans for interest rates.

The 50 basis point cut to the reserve requirement ratio (RRR) was the first since September and twice as big as usual, which analysts said showed officials were getting increasingly worried about the economic outlook.

Meanwhile, the rupee remained unchanged against the US dollar in the inter-bank market on Thursday. As per the State Bank of Pakistan, the local unit closed at 279.67 against the greenback.

Volume on the all-share index decreased to 460.7 million from 480 million a session before.

The value of shares increased to Rs25.2 billion from Rs22.5 billion in the previous session.

Oil & Gas Dev. was the volume leader with 50 million shares, followed by K-Electric Ltd with 49 million shares, and Hascol Petrol at 39 million shares.

Shares of 353 companies were traded on Thursday, of which 102 registered an increase, 233 recorded a fall, while 18 remained unchanged.