Stocks decline as market gets spooked by mini-budget talks

Stocks ended lower on Tuesday following range-bound trade as investors get worried over mini-budget talks and government decision to take tougher steps to woo IMF, traders said.

Pakistan Stock Exchange (PSX) benchmark KSE 100-share Index shed 0.45 percent or 185.26 points to close at 40,630.64 points against 40,815.90 points recorded in the last session. Intraday high was 41,015.92 points, while the lowest level of the day was recorded at 40,595.02 points.

Analyst Muhammad Arbash of Topline Securities said equities closed negative, with the index settling at 40,663 level, down 0.37 percent. Range-bound activity was witnessed at the bourse, where the market made an intraday high of 200 points and a low of 220 points. “Market witnessed a declining trend in the second half after Defence Minister Khawaja Asif's announcement regarding federal government’s energy conservation plan that will enforce the closure of markets at 8:30pm and wedding halls at 10pm,” he said.

KSE-30 index also decreased by 51.07 points or 0.34 percent to close at 14,975.25 points compared with 15,026.32 points recorded in the last session.

Traded shares decreased by 41 million shares to stand at 201.058 million shares from 242.173 million shares. Value dropped to Rs4.977 billion from Rs7.278 billion. Market capital narrowed to Rs6.508 trillion from Rs6.543 trillion. Out of 333 companies active in the session, 113 closed in green, 192 in red and 28 remained unchanged.

Analyst Ahsan Mehanti of Arif Habib Corp said stocks fell across the board as investors weighed economic uncertainty amid year-on-year rise of 24.47 percent in CPI inflation for December 2022.

Reports over imminent announcements of IMF programme conditions on energy, flood levies and mini-budget; concerns for power sector debt surging to over Rs2.5 trillion in addition to Rs2.6 trillion circular debt crises; political noise and rupee instability played a catalytic role in the bearish close, he added.

Major negative sentiments were witnessed in the cement sector where Lucky Cement, DG Khan Cement, Cherat Cement, and Maple Leaf Cement closed lower.

The highest increase was recorded in the shares of Premium Tex, up Rs39.68 to close at Rs575.03/share, followed by Colgate Palm, up Rs30.01 to close at Rs1,900.01/share. A significant decline was noted in the shares of Sapphire Textiles, down Rs66.17 to end at Rs1,100/share, followed by Sanofi-Aventis, down Rs44.40 to end at Rs955.60/share.

Brokerage Arif Habib Ltd said a range-bound session was witnessed at the PSX on Tuesday.

The market opened in a positive zone, but lack of investor participation pushed the index down to trade in a narrow range throughout the rest of the session. “Market participation was comparatively lower than the previous session as volumes remained good in the main board; however, decent volumes were recorded in the 3rd tier stocks,” it added.

Sectors contributing to the performance included cements (-60.4 points), commercial banks (-53.1 points), power generation and distribution (-27.5 points), tobacco (-14.6 points), and pharmaceuticals (-14.2 points).

Hascol Petrol remained the volume leader with 20.576 million shares that increased by 3 paisas to stand at Rs6.64/share. It was followed by WorldCall Telecom with 16.289 million shares that increased by 4 paisas to stand at Rs1.24/share.

Other stocks that recorded significant turnover included Sui Northern Gas Pipelines, Al Shaheer (R), Dewan Farooque, Cnergyico, Pakistan Petroleum, PIAC(A), Dewan Cement and Bank Al-Falah.

Shares’ turnover in the future contracts decreased to 35.480 million shares from 58.085 million shares in the last session.