Stocks close lower amid fears of higher taxes on capital markets

KARACHI: Stocks remained under pressure and fell on Wednesday as investors feared higher tax measures on capital markets in the upcoming federal budget.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 share Index decreased by 447.22 points or 0.60 per cent to 74,219.44 points against 74,666.66 points recorded in the last session. The highest index of the day remained at 74,758.11 points while the lowest level was recorded at 74,136.52 points.

Analyst Ahsan Mehanti at Arif Habib Corp said: “Stocks fell sharply lower amid the ongoing rumours of higher tax measures on capital markets in the Federal Budget FY25 and uncertainty over SBP policy rates stance.”

He said political noise and dismal data on fertilizer offtake for May 24 played a catalyst role in the bearish close.The KSE-30 index decreased by 139.37 points or 0.58 per cent to 23,779.35 points against 23,918.72 points.

Traded shares dropped by 66 million shares to 348.549 million shares from 414.479 million shares. The trading value dropped to Rs16.389 billion from Rs18.311 billion. Market capital narrowed to Rs10.006 trillion against Rs10.061 trillion. Of 441 companies active in the session, 127 closed in green, 246 in red and 68 remained unchanged.

Naveed Nadeem, an analyst at Topline Securities, said that stock market experienced a decline during the trading session. The index started at 74,758 points, declined to a low of 74,137 points, and eventually settled at 74,219 points, marking a decrease of 0.60 per cent or 447 points.

“The negative trajectory was primarily influenced by weaknesses in the banking and exploration sectors,” he said. Companies such as HBL, OGDC, BAFL, BAHL, and PPL collectively contributed to a loss of 225 points. However, there were some positive movements from EFERT, FABL, and TRG, which collectively added 37 points to the index.

The highest increase was recorded in Exide Pakistan Limited shares, which rose by Rs39.93 to Rs539.06 per share, followed by Sazgar Engineering Works Limited, which increased by Rs27.95 to Rs840.21 per share. A significant decline was noted in Unilever Pakistan Foods Limited, which fell by Rs115.03 to Rs18,350 per share, Hallmark Company Limited followed it, which closed lower by Rs31.74 to Rs420.14 per share.

Brokerage Arif Habib Ltd stated the PSX witnessed continued pressure on Wednesday as key indices fell further below crucial levels, indicating a persistent bearish trend.The KSE-100 index and the KSE-30 index remained below their key support levels, showing a clear willingness to move lower.

The market remains under pressure, with the 75,500 level for the KSE-100 and the 24,200 level for the KSE-30 expected to cap any near-term gains. Investors are advised to allow the current downside move to conclude before considering new long positions, as the market’s direction remains uncertain.

As the market navigates through this bearish phase, close attention will be paid to economic indicators and external factors that could influence future movements.

K-Electric Ltd remained the volume leader with 25.285 million shares which closed lower by one paisa to Rs4.86 per share. Amtex Limited followed it with 23.587 million shares, which closed higher by Re1.0 to Rs3.56 per share.

Other significant turnover stocks included WorldCall Telecom, National Bank XD, Dewan Motors, Air Link Commun, Netsol Tech., Hum Network, TRG Pak Ltd and Fauji Cement.In the futures market, 311 companies recorded trading, of which 58 increased, 247 decreased and 6 remained unchanged.