KARACHI: Pakistan stocks ended flat on Tuesday as the continuous depreciation of the Pakistani Rupee (PKR) against the US Dollar weighed heavily on investor sentiment.
The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) closed at 41,860 points, marking a marginal gain of one point from the previous day’s close of 41,859 points.
Analysts at Arif Habib Limited noted that the Pakistan stocks remained range-bound throughout the day due to concerns over rising inflation. Although the KSE-100 index opened in the positive zone, investor participation remained subdued due to the ongoing rupee devaluation against the dollar.
The US Dollar extended its upward trajectory against the PKR on Tuesday, closing at Rs221.42 in the interbank foreign exchange market. This marked a significant decline of Rs1.56 in the rupee’s value from the previous day’s closing rate of Rs219.86.
Despite the flat performance of the main index of Pakistan stocks, trading volumes saw an uptick. Total volumes increased from 156.8 million shares to 187.3 million shares, reflecting a 19.4% day-on-day increase. However, the average traded value decreased by 8.0% to reach USD 18.1 million, down from USD 19.7 million the previous day.
Activity at Pakistan stocks was largely concentrated in third-tier stocks, while volumes on the main board remained dry. Key sectors contributing to the market’s performance included Banks, which added 33.1 points to the index, Oil Marketing Companies (OMCs) with 31.3 points, Technology with 25.9 points, Automobiles with 10 points, and Chemicals with 10 points.
Among individual at Pakistan stocks, significant contributions to trading volumes came from HASCOL, Pakistan International Airlines Corporation (PIAA), Cnergyico Pk Limited (CNERGY), Pakistan Refinery Limited (PRL), and Worldcall Telecom Limited (WTL).
The persistent depreciation of the rupee is a cause of concern for market participants, as it fuels inflationary pressures and undermines economic stability. Investors are keenly watching for any signs of policy intervention that might stabilize the currency and, by extension, restore confidence in the equity market.
Going forward, market analysts suggest that the Pakistan stocks may continue to experience range-bound activity unless there is a significant change in the economic fundamentals or a positive development on the macroeconomic front. For now, the PSX seems to be treading water, caught between the pressures of a weakening currency and the hope for a recovery in investor sentiment.
