Stocks end week with drop of 440 points as political and economic concerns persist

KARACHI: Stocks fell on Friday again, contributing to the overall decline of above 2.0 per cent in the week, as political and economic uncertainty continued.

The Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share Index decreased by 439.82 points or 0.56 per cent to 78,029.51 points against 78,469.33 points recorded in the last session. The highest index of the day remained at 78,569.89 points while the lowest level was recorded at 77,921.48 points.

Analyst Ahsan Mehanti at Arif Habib Corp said, “Stocks closed lower amid investor worries over economic and political uncertainty.”He said that weak global equities, falling FX reserves, uncertainty over terms of re-profiling China’s energy debt, ongoing political noise amid a surge in taxes, and power bills played a catalyst in the bearish close.

The KSE-30 index decreased by 114.19 points or 0.45 per cent to 25,084.06 points against 25,198.26 points.Traded shares decreased by 49 million to 278.327 million from 327.279 million. The trading value dropped to Rs11.621 billion from Rs15.621 billion. Market capital narrowed to Rs10.389 trillion against Rs10.458 trillion. Of 429 companies active in the session, 114 closed in green, 255 in red and 60 remained unchanged.

Nabeel Haroon, analyst at Topline Securities, said a range-bound session was observed as investors preferred to remain on the sidelines before the monetary policy meeting on Monday (July 29). After trading sideways, the index finally settled at 78,030 (down by 0.56 per cent).

Major positive contributions to the index came from BAHL, BAFL, UBL, HUBC and PAKT, cumulatively contributing 216 points. On the other hand, HBL, OGDC, MEBL, PSO and SYS lost value to weigh down on the index by 258 points.

The highest increase was recorded in PIA Holding Company LimitedB shares, which rose by Rs54.21 to Rs952.21 per share, followed by Rafhan Maize Products Company Limited, which increased by Rs22.57 to Rs7,598.99 per share. A significant decline was noted in Nestle Pakistan Limited, which fell by Rs56.96 to Rs6,900 per share; Sazgar Engineering Works Limited followed it, which closed lower by Rs38.03 to Rs1,043.28 per share.

Brokerage Arif Habib Ltd stated that the KSE-100 index experienced its second consecutive week-on-week decline, losing 2.35 per cent and bringing the index down to the weekly support level of 77,500 to 78,000. This support level is being closely watched for signs of a potential reversal.

Next week, the key event to watch will be the State Bank of Pakistan’s monetary policy committee (MPC) meeting. It is anticipated that the MPC will cut rates by another 100 basis points, bringing rates to levels not seen since March 2023. This decision could have significant implications for market direction.

Market analysts suggest that regaining the 80,000 mark is crucial. A move back above this level will signal the end of the current drawdown period and potentially set the stage for a more sustained recovery.

K-Electric Ltd remained the volume leader with 15.218 million shares which closed lower by 8 paisas to Rs4.27 per share. Sui North Gas followed it with 14.833 million shares, which closed lower by Rs2.63 to Rs69.98 per share.

Other significant turnover stocks included WorldCall Telecom, Quice Food, Agritech Limited, Dewan Motors, Hascol Petrol, Silk Bank Ltd, Cnergyico PK and PIA Holding Company.In the futures market, 303 companies recorded trading, of which 39 increased, 263 decreased and one remained unchanged.