KARACHI: Despite the historic accords signed between Pakistan and Saudi Arabia, the equity market responded negatively on Monday as the benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) closed at 40,219 points, showing a decline of 267 points from 40,487 points.
The market opened on a positive note with an increase of 168 points. However, selling pressure ensued, leading to a market plunge by 3:00 PM, reaching 40,000, a drop of 487 points. The last half-hour witnessed a recovery of 230 points, reducing the total loss to 255 points by the closing bell.
Analysts at Arif Habib Limited noted the negative stance taken by the market despite the historic accords signed between Pakistan and the Kingdom of Saudi Arabia. The visit of the Saudi Crown Prince resulted in investment agreements worth $20 billion, covering sectors such as energy and agriculture.
Cement sector stocks, including FCCL, DGKC, and MLCF, traded in the red, leading the volumes in the market. The banking sector also faced selling pressure, with HBL and UBL trading below yesterday’s closing levels. KEL topped the volumes chart, but the total volume traded remained low at 6.3 million shares.
Sectors contributing to the market’s negative performance included Cement (-65 points), Banks (-58 points), Fertilizer (-38 points), Power (-16 points), and Pharma (-15 points). The decline in these sectors offset gains in others.
The overall volume increased slightly from 93 million shares to 99 million shares, reflecting a 6 percent day-on-day increase. The average traded value also saw a slight uptick, reaching US$34 million compared to US$33.8 million the previous day, a 1 percent day-on-day increase.
Stocks that significantly contributed to the volumes included KEL, PAEL, FFL, LOTCHEM, and STPL, forming 27 percent of the total volumes. Positive contributions to the market came from PSO (+16 points), OGDC (+7 points), NESTLE (+5 points), POL (+4 points), and KTML (+3 points).
On the negative side, stocks such as LUCK (-23 points), DGKC (-20 points), DAWH (-18 points), UBL (-18 points), and MARI (-18 points) had a considerable impact on the overall market decline.
The market’s response suggests that despite the positive sentiment generated by the Saudi investment agreements, other factors such as investor sentiment, external economic conditions, and local economic challenges continue to influence the equity market. Investors and analysts will be closely monitoring the market dynamics in the coming days to gauge the sustainability of the recent recovery and assess the impact of external and internal factors on the overall market performance.
