PSX: selling pressure at bourse, KSE-100 falls nearly 2,000 points amid political volatility

The Pakistan Stock Exchange (PSX) witnessed a bearish trading session on Monday, with the benchmark KSE-100 Index shedding nearly 2,000 points amid rising political noise on the domestic front.

The benchmark KSE-100 Index opened the session and initially surged to an intraday high of 166,988.32, but failed to sustain the early gains.

The index subsequently came under sustained selling pressure, maintaining a downward trajectory throughout the session. Although a brief recovery emerged around midday, the market resumed its decline, with losses accelerating after 1pm and the index approaching its intraday low towards the close.

At close, the KSE-100 settled at 165,124.41, down 1,964.86 points or 1.18%.

“The bearish sentiment followed the federal government’s decision to impose emergency in KP, after President Asif Ali Zardari approved the federal cabinet’s recommendation on Sunday. The development heightened political uncertainty, prompting investors to adopt a cautious stance amid concerns over the evolving situation,” brokerage house Topline Securities said in its post-market report.

“The announcement further dampened investor sentiment, triggering broad-based selling as market participants remained on the sidelines amid heightened uncertainty and a lack of fresh positive triggers.”

Index-heavy stocks remained under pressure, with UBL, OGDC, HBL, MEBL, and LUCK emerging as the major laggards, collectively shaving approximately 645 points off the KSE-100 Index,” Topline said.

Analysts also attributed the decline to rising domestic political uncertainty after the federal government imposed emergency rule in Khyber Pakhtunkhwa.

“This has added to an already cautious mood, as already elevated global oil prices and ongoing geopolitical uncertainties continue to weigh on investor sentiment,” Saad Hanif, Head of Research at Ismail Iqbal Securities, told Business Recorder.

“As a result, investors are staying on the sidelines and market participation remains subdued, which is putting pressure on the index,” he added.

During the previous week, the PSX observed selling pressure, as persistent US-Iran tensions, escalating military clashes between Saudi Arabia and Yemen’s Houthi forces, and heightened regional security concerns weighed on investor sentiment. The KSE-100 Index fell 1,066.20 points, or 0.6% week-on-week, to close at 167,089.28 points.

Internationally, Asian share markets got off to a cautious start on Monday as earnings season loomed as a challenge ​to sky-high tech valuations, while oil was choppy after strikes on shipping and airports in the Gulf.

There was considerable confusion about President Donald ‌Trump’s announcement of an energy ceasefire between Ukraine and Russia, which neither side had confirmed.

Trump’s proposal for Russia to increase its exports of diesel was also under fire from Republican and Democratic senators as potentially illegal.

South Korean stocks fell 1.1%, while MSCI’s broadest index of Asia-Pacific shares outside Japan was little ​changed.

On Wall Street, S&P 500 futures edged up 0.2%, while Nasdaq futures firmed 0.5%. In Europe, EUROSTOXX 50 ⁠futures firmed 0.4%, while DAX futures gained 0.4% and FTSE futures added 0.3%.

Trade was thin with Japan markets shut and the US on a ​partial holiday ahead of the earnings season, with major US banks kicking off on Tuesday. S&P 500 earnings are expected to have jumped by more than ​30% in the third quarter, according to LSEG IBES, though the bulk of that comes from the tech sector.

Meanwhile, the Pakistani rupee extended its marginal gains against the US dollar, appreciating 0.01% in the inter-bank market on Monday. The local unit closed the day at 276.97, a gain of Re0.03 against the greenback.

Volume on the all-share index increased to 362.95 million from 309.41 million recorded in the previous close.

The value of shares declined to Rs14.51 billion from Rs15.44 billion in the previous session.

Treet Corp was the volume leader with 27.31 million shares, followed by LSE Financial(R) with 20.83 million shares, and WorldCall Telecom with 20.35 million shares.

Shares of 500 companies were traded on Monday, of which 135 registered an increase, 322 recorded a fall, and 43 remained unchanged.