Karachi, April 29, 2024 – The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) experienced a significant downturn, losing 1,048 points, closing at 71,695 after an earlier peak crossing the 73,000 milestone during Monday’s trading session.
The index had opened on a buoyant note, propelled by positive momentum from the previous week, and initially soared to an intraday high of 73,301, up by 558 points or 0.77 percent. However, the surge was short-lived as investors began to book profits, which led to a sharp decline. The market downturn was accentuated by significant sell-offs, particularly in the power, fertilizer, and exploration and production (E&P) sectors, culminating in the index settling at a loss of 1.44 percent by the end of the day.
Contributing to the heavy sell-off were major stocks like Hub Power Company (HUBC), Engro Fertilizers Ltd (EFERT), Fauji Fertilizer Company Ltd (FFC), Oil & Gas Development Company (OGDC), and Mari Petroleum Company Ltd (MARI), which collectively dragged the index down by 497 points. Conversely, slight gains were noted in Fauji Fertilizer Bin Qasim Ltd (FFBL), National Foods Ltd (NATF), and Highnoon Laboratories (HINOON), which together added 71 points, indicating selective buying interest in these stocks.
The market’s volatility was underpinned by two key events that were keenly awaited by investors. The Monetary Policy Committee (MPC) was scheduled to meet to review interest rates amidst calls for monetary easing to support the struggling economic activities against the backdrop of historically high rates. Investor sentiment was split, with expectations hovering between a status quo and a potential rate cut of 50 to 100 basis points.
Adding to the market’s uncertainty was the anticipated meeting of the International Monetary Fund’s (IMF) Board of Directors. The meeting was expected to approve a critical $1.1 billion tranche for Pakistan, following a staff-level agreement reached last month. The outcome of these meetings is expected to have significant implications for market sentiment going forward.
Trading volume on Monday was robust with over 611.8 million shares exchanged, and the total trading value reached approximately Rs26.2 billion. HASCOL was the most actively traded stock with over 60 million shares changing hands.
Investor focus will remain on the outcomes of the MPC and IMF meetings, which are likely to provide clearer direction for the market’s trajectory in the upcoming sessions. As Pakistan grapples with economic challenges, the decisions made in these meetings could be pivotal in shaping market confidence and economic policy moving forward.
Market analysts advise investors to maintain caution and closely monitor the unfolding economic policies and global financial cues that could influence market dynamics. The coming days are expected to be critical for both the PSX and the broader Pakistani economy as stakeholders await decisions that could have far-reaching effects on the nation’s financial and economic landscape.
