Infostani International: The Pakistan Stock Exchange (PSX) faced a tumultuous day marked by a significant meltdown, spurred by post-election political instability. This triggered widespread panic selling, driving the benchmark KSE 100-share index below 61,000 for the first time, hitting an intraday low at 60,647.68.
Pakistan Stock Exchange Witnessed Meltdown Amid Political Instability
On Monday, the Pakistan Stock Exchange (PSX) experienced a meltdown due to post-election political instability triggering widespread panic selling. This led to the benchmark KSE 100-share index dropping below 61,000, hitting an intraday low of 60,647.68.
Tahir Abbas, Head of Research at Arif Habib Ltd, stated that the political ambiguity and lack of clarity on the circular debt resolution plan negatively affected market sentiments. He emphasized the need for clarity on government formation and key ministerial portfolios, along with the economic roadmap of the new government.
The equities began trading negatively and remained bearish throughout the session, according to Topline Securities Ltd. However, some investors engaged in cherry-picking at attractive levels, helping the benchmark index recover some lost ground.
Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company, attributed investor sentiment decline to the split mandate and uncertainty about the formation of a new coalition government. He mentioned the IMF’s stance on negotiating the last review under the current Stand-By Arrangement and the anticipation of a new program with the elected government.
Market Analysis and Closing Summary of the Pakistan Stock Exchange (PSX)
The market is expected to remain under pressure until clarity emerges on the formation of the new coalition government, Samiullah added. He also noted investor concerns regarding the caretakers’ plans for circular debt and industrial power tariff reduction, which may not be cleared by the IMF soon.
Exploration and production, power, and cement sectors faced heavy selling pressure, resulting in a cumulative point drop of 640 points from the index. Moody’s rating concerns over political instability, policy uncertainty, and high leveraging at PSX contributed to the bearish close, as highlighted by Ahsan Mehanti of Arif Habib Corporation.
Despite political protests and security unrest, the Special Investment Facilitation Council initiatives were seen as a positive prospect for the new coalition government, likely to attract investment commitments from Qatar, the UAE, and Saudi Arabia.
Key Highlights of KSE-100 Index Performance and Market Activity
The KSE-100 index closed at 61,065.32 points, marking a decrease of 1,878.43 points or 2.98% from the preceding session. Trading volume surged by 36.61%, reaching 349.97 million shares, while the traded value increased by 1.72% to Rs12.74bn on a day-on-day basis.
Significant contributors to the traded volume included Pakistan K-Electric, WorldCall Telecom Ltd, Oil and Gas Development Company Ltd, Hascol Petroleum Ltd, and Pakistan Petroleum Ltd.
Mari Petroleum Ltd, Hoechst Pakistan Ltd, Bata Pakistan Ltd, Al-Ghazi Tractors Ltd, and Attock Petroleum Ltd experienced the most significant decreases in their share prices, while Pakistan Hotels Developers Ltd, Ibrahim Fibres Ltd, Crescent Cotton Ltd, Sazgar Engineering Ltd, and EMCO Ltd witnessed the largest increases in their share prices.
Foreign investors remained net buyers, purchasing shares worth $0.65m.