Karachi, Pakistan – On Thursday, the equity market of Pakistan has plunged by 209 points due to selling pressure observed during the day.
The Pakistan Stock Exchange (PSX) experienced a downturn, with the benchmark KSE-100 index closing at 40,070 points, marking a decline of 209 points from the previous day’s closing at 40,279 points.
Analysts attribute this decline to the release of financial results by key players in the banking sector, notably Habib Bank Limited (HBL) and United Bank Limited (UBL), raising concerns among investors.
The day began with an initial uptick of 137 points, but the market sentiment took a sharp turn as the index dropped by approximately 400 points during the trading session. Arif Habib Limited analysts indicated that the primary reason for the decline was the publication of financial reports by HBL and UBL, leading to investor unease and subsequent selling pressure on both bank stocks.
UBL, ranking third on the volumes chart, saw significant activity with 5 million shares traded. In contrast to yesterday’s upper circuit performance, UBL hit the lower circuit on Thursday. Similarly, HBL faced comparable pressures, realizing a volume of 2.5 million shares. Despite a drop towards the lower circuit, HBL’s price rebounded and closed near 135.
Sectors contributing to the market’s performance witnessed a mixed trend, with Power (-104 points), Banks (-70 points), and Fertilizer (-21 points) experiencing declines, while Cement (+19 points) and Autos (+14 points) showed some resilience.
Overall volumes in the market declined from 132 million shares to 103 million shares, representing a 22 percent day-on-day decrease. The average traded value also witnessed a decline of 9 percent, reaching US$ 43.5 million compared to the previous day’s US$ 47.9 million.
Key stocks that significantly influenced the trading volumes included UNITY, KEL, UBL, LOTCHEM, and MEBL, accounting for 30 percent of the total volumes.
Stocks contributing positively to the index included BAHL (+45 points), MCB (+36 points), LUCK (+15 points), THALL (+14 points), and BAFL (+8 points). Conversely, stocks that contributed negatively included UBL (-81 points), HUBC (-73 points), HBL (-67 points), KAPCO (-24 points), and FABL (-11 points).
The market’s reaction to the financial reports of major banking players underscores the importance of transparency and robust financial performance in shaping investor sentiment. As the banking sector plays a pivotal role in the Pakistani economy, fluctuations in their financial results can have a ripple effect on the overall stock market.
Investors are likely to closely monitor further developments and reassess their positions in response to the unfolding dynamics within the banking sector. The broader market will depend on how key players navigate challenges and implement strategic measures to maintain stability and investor confidence.
