Staff Reporter
Karachi
In line with the trend in the preceding week, tumultuous trading remained the norm at the Pakistan Stock Exchange (PSX) as the index slid deep into the red amid weak investor interest for the fourth successive week.
The benchmark KSE-100 index dived 437 points or 1.4% week-on-week to settle at 31,666 points. The downward trajectory was seen on the back of various developments that unfolded during the week. Participants reacted negatively to the surge in inflation, which came in at the 68-month high of 10.3%.
Concerns about further tightening of the monetary policy due to the uptick in inflation also weighed on sentiments. Moreover, delay in creation of the State Enterprise Fund and expectations of weak corporate results by some sectors also kept the market under pressure.
Monday trading kicked off on a bearish note, pushing the index below the 32,000 mark despite dull trading. Selling pressure persisted as the KSE-100 lost further ground on Tuesday. Things took a turn on Wednesday as expectations about a hike in petroleum product prices boosted stocks of exploration and production and oil and gas marketing companies.
However, the positive momentum could not be sustained and the index once again retreated to the south. Political noise and close of the rollover week resulted in the index finishing the remaining two sessions in the negative zone.
On the political front, uncertainty prevailed with opposition parties stepping up efforts to replace the Senate chairman. This also added to the sombre mood, forcing investors to remain on the sidelines.
Meanwhile, traders announced a country-wide protest and strike on the CNIC condition, with one political party announcing a long march. Activity remained slow as average daily volumes slumped 25% to 57 million shares while average daily value dipped 21% to $13 million. Overall, macroeconomic issues dominated the market momentum, while reform measures created a dull investment outlook.
Contribution to the downside was led by commercial banks (down 239 points) amid selling from mutual funds, tobacco (57 points), oil and gas exploration companies (52 points) on the back of a decline in international oil prices, power generation and distribution companies (35 points), and oil and gas marketing companies (32 points). Stock-wise, major losers were PPL (down 69 points), MCB Bank (62 points), Pakistan Tobacco (57 points), UBL (56 points) and Bank AL Habib (44 points). Major gainers were POL (up 37 points), Engro (17 points) and Packages Limited (15 points). Foreigners accumulated stocks worth $3.4 million compared to net buying of $8.4 million last week. Major buying was witnessed in cement companies ($3.1 million) and all other sectors ($1.2 million). On the local front, selling was reported by mutual funds ($4.8 million), followed by companies ($1.7 million).
