Karachi, July 30, 2024 – The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) witnessed a drop of 199 points on Tuesday in a trading session marked by significant volatility. The index closed at 78,529 points, down from the previous day’s closing of 78,728 points.
Analysts at Topline Securities Limited noted that the KSE-100 index experienced swings in both directions throughout the day. The index reached an intraday high of 499 points and an intraday low of 309 points before settling at 78,629 points, reflecting a decline of 0.25%.
The recent decision by the State Bank of Pakistan (SBP) to cut the lending rate by 100 basis points to 19.5% on Monday played a significant role in the day’s trading dynamics. This rate cut, which continues the trend initiated on June 10, aims to stimulate economic activities, with the real GDP projected to grow by 2.5-3.5% in the current fiscal year.
Among the key corporate announcements, Fauji Fertilizer Company (FFC) from the fertilizer sector reported its second-quarter results for 2024. The company posted earnings per share (EPS) of Rs12.22, along with a cash dividend of Rs10 per share, surpassing industry expectations. This positive news contributed to the upward movement in FFC’s stock.
Several companies contributed positively to the index. FFC, Hub Power Company (HUBC), Millat Tractors Limited (MTL), Engro Corporation (ENGRO), and Bank AL Habib Limited (BAHL) collectively added 269 points to the index. On the contrary, Engro Fertilizers Limited (EFERT), Dawood Hercules Corporation Limited (DAWH), and Habib Bank Limited (HBL) experienced profit-taking, leading to a combined loss of 158 points.
The trading volume at the KSE-100 index was robust, with over 312 million shares traded, amounting to a total value of Rs 17.6 billion. The Oil and Gas Development Company Limited (OGDCL) led the volumes chart, with over 24.8 million shares changing hands.
Market sentiment remained cautious, as investors reacted to both local and global economic indicators. The SBP’s interest rate cut was seen as a positive step towards economic recovery, yet concerns about inflation and fiscal challenges persist. The mixed performance of individual stocks reflects the broader uncertainty in the market.
Overall, the day’s trading session highlighted the balancing act between optimism about economic policies and cautiousness regarding the broader economic landscape. As the market continues to navigate these factors, analysts expect further volatility in the short term.
Investors are advised to keep a close watch on upcoming corporate earnings reports and macroeconomic developments. The focus will remain on how effectively the SBP’s rate cuts translate into economic growth and how companies adapt to the evolving economic environment.
The 199-point drop in the KSE-100 index underscores the complexities of the current market dynamics. With significant movements in both directions, the market remains in a state of flux, reflecting investor sentiment that is both hopeful and wary of the future.