Stocks close lower amid pre-budget uncertainty

KARACHI: Stocks closed lower on the first day of the week, Monday, as the market remained under pressure amid pre-budget uncertainty.

The Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share Index decreased by 303.22 points or 0.40 percent to 75,575.26 points against 75,878.48 points recorded in the last session. The highest index of the day remained at 76,209.97 points while the lowest level was recorded at 75,495.38 points.

Analyst Ahsan Mehanti at Arif Habib Corp said: “Stocks closed under pressure on pre-budget uncertainty and terms of a new IMF bailout package for tax reforms, tariff hikes and rupee depreciation.”He said that the weak rupee, falling FX reserves and concerns over unsettled China IPP dues played a catalyst role in the bearish close.

The KSE-30 index decreased by 131.46 points or 0.54 per cent to 24,211.61 points against 24,343.07 points.Traded shares dropped by 82 million shares to 441.261 million shares from 523.299 million shares. The trading value dropped to Rs18.634 billion from Rs20.574 billion. Market capital, however, expanded to Rs10.182 trillion against Rs10.169 trillion. Of 427 companies active in the session, 200 closed in green, 178 in red and 49 remained unchanged.

Naveed Nadeem, an analyst at Topline Securities, said equity market experienced a decline. The KSE-100 index reached a high of 76,210 points and a low of 75,495 points, finally closing at 75,575 points, marking a decrease of 303 points or 0.40 percent.

The negative trend was influenced by the IT, banking, and fertilizer sectors, with companies such as SYS, FFC, EFERT, MEBL, and Engro collectively shedding 219 points. However, there were some positive contributions from TRG, MTL, and POL, which collectively added 96 points.

The highest increase was recorded in Nestle Pakistan Limited shares, which rose by Rs154.64 to Rs7,349.19 per share, followed by Sazgar Engineering Works Limited, which increased by Rs34.31 to Rs820.45 per share. A significant decline was noted in Sapphire Fibres Limited, which fell by Rs72.57 to Rs1,407.43 per share, Hallmark Company Limited followed it, which closed lower by Rs35.23 to Rs456.43 per share.

Brokerage Arif Habib Ltd stated the PSX experienced a sluggish start to the new trading week with key benchmarks continuing to move sideways. Market activity reflected a cautious sentiment ahead of the upcoming federal budget announcement.

The technology sector saw a positive bid with significant gains from NetSol Technologies Limited (NETSOL), Octopus Digital Limited (OCTOPUS), and Airlink Communication Limited (AIRLINK), all up by 8.0 per cent, 8.0 per cent, and 5.36 percent respectively.

Adding to the mix, the May Consumer Price Index (CPI) came in cooler than expected at 11.8 per cent year-over-year, below the anticipated 13 per cent. However, this lower-than-expected inflation figure failed to invigorate the market as investors remain wary of the budget’s potential impact on market dynamics.

The KSE-100 index remains around the critical 75,000 level, while the KSE-30 hovers near 24,000. These levels are key to watch in determining the market’s near-term direction.

As the week progresses, market participants will be closely monitoring these benchmarks for any significant moves that could indicate a shift in market sentiment, particularly as the federal budget announcement draws nearer.

Fauji Cement remained the volume leader with 32.835 million shares which closed higher by 21 paisas to Rs23.66 per share. K-Electric Ltd followed it with 31.651 million shares, which closed higher by 5 paisas to Rs5.01 per share.

Other significant turnover stocks included PIA Holding Company, Dewan Motors, Air Link Commun, WorldCall Telecom, Pak Elektron, Avanceon Ltd, Kohinoor Spining and Hum Network. In the futures market, 311 companies recorded trading, of which 147 increased, 157 decreased and 7 remained unchanged.