KSE-100 suffers record single-day drop on political turmoil

KARACHI: The KSE-100 Index faced its steepest single-day decline in history on Tuesday, plunging 3,506 points (3.57 per cent) to close at 94,574.16 as political uncertainty triggered panic selling at the Pakistan Stock Exchange (PSX).

While the market looked all set to hit the 100,000 mark with a record intraday high of 99,819.59 points, it soon lost its steam. Analysts attributed the fall to heightened political tension in Islamabad and selling pressure during the futures contracts rollover period. Given an unclear political horizon, brokers have also issued cautious warnings to investors in the coming days.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index plunged by a record 3,505.62 points or 3.57 per cent to 94,574.16 points against 98,079.78 points recorded in the last session. The highest index of the day remained at 99,819.59 points while the lowest level was recorded at 94,180.6 points.

Muhammad Awais Ashraf, director research of AKD Securities, said that investors are cautious amid the current political climate, but conventional banks provided some support to the index, aided by the removal of the minimum deposit rate for public-sector entities, financial institutions and public limited companies. During this quarter, the E&P and fertiliser sectors, which have been key drivers of the KSE-100 Index due to improvements in energy-sector challenges, experienced significant losses in Tuesday’s trading. Meezan Bank also emerged as the worst performer on the index, impacted by the new profit-sharing formula regulation introduced by the SBP, he said.

The KSE-30 index decreased by 1,113.91 points or 3.65 per cent to 29,444.82 points against 30,558.73 points.

Traded shares increased by 470 million shares to 1,116.324 million shares from 640.258 million shares. The trading value rose to Rs43.291 billion from Rs25.623 billion. Market capital narrowed to Rs12.052 trillion against Rs12.533 trillion. Of the 456 companies active in the session, 53 closed in green, 355 in red and 48 remained unchanged.

Ahsan Mehanti, an analyst at Arif Habib Corp, said, “Panic selling was witnessed at the PSX amid political turmoil following prolonged PTI protests in the capital.”

He said political uncertainty, foreign outflows, and selling pressure during the PSX futures contracts rollover period acted as key catalysts for the record bearish activity. The highest increase was recorded in Sapphire Textile Mills Limited, which rose by Rs40.88 to Rs1,177.99 per share, followed by Mehmood Textile Mills Limited, which increased by Rs35.02 to Rs535.4 per share. A significant decline was noted in Rafhan Maize Products Company Limited, which fell by Rs141.07 to Rs7,813.48 per share; Unilever Pakistan Foods Limited followed it, which closed lower by Rs112.79 to Rs19,019.35 per share.

Analyst Maaz Mulla at Topline Securities said the KSE-100 Index witnessed its largest-ever single-day decline, dropping 3,506 points (3.57 per cent) to close at 94,574. “This steep fall was driven by political uncertainty stemming from a party’s march towards the capital, shaking investor confidence,” he said.

Intraday, the index swung between a low of 3,899 points and a high of 1,739 points. The State Bank of Pakistan’s (SBP) removal of the minimum deposit rate (MDR) on conventional banks for companies, alongside its directive for Islamic banks to pay at least 75 per cent of the weighted average gross yield on PKR savings individual deposits, further unsettled the market.

Islamic banks -- MEBL, FABL, and BIPL -- hit their lower price locks (10 per cent), while negative contributions from MEBL, FFC, OGDC, PPL, and HUBC dragged the index down by 1,385 points. On the positive side, HBL, HMB, BAHL, and BAFL added 282 points, softening the blow.

Analyst Mubashir Anis Naviwala at JS Global said political uncertainty triggered a market correction of 3,900 points during intraday drading. “After peaking at an intraday high of 99,819 points, widespread panic selling ensued across all sectors, except for conventional banks, which outperformed due to the SBP’s relaxation of the minimum profit rate,” he said.

“Moving forward, we advise adopting a cautious stance in the market,” he suggested.

K-Electric Ltd remained the volume leader with 101.636 million shares which closed lower by 54 paisas to Rs4.65 per share. BO Punjab followed it with 92.023 million shares, which closed higher by 4 paisas to Rs6.85 per share.

Other significant turnover stocks included Hascol Petrol, Fauji Foods Ltd, Sui South Gas, Treet Battery Ltd, Pace (Pak) Ltd, WorldCall Telecom, Cnergyico PK and Waves Home App. In the futures market, 310 companies recorded trading, 35 of which increased, 274 decreased, and one remained unchanged.