Pakistan stocks faced a significant downturn on Tuesday, with the benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) plummeting by 490 points due to rising political uncertainty and concerns over dwindling foreign exchange reserves.
The KSE-100 index of Pakistan stocks closed at 41,950 points, a steep decline from the previous day’s closing of 42,440 points. This drop, representing a 1.15% decrease, reflects the pervasive apprehension among investors regarding the country’s political and economic stability.
Analysts at Arif Habib Limited highlighted that the Pakistan stocks opened on a negative note and experienced volatility throughout the trading session. The primary factors contributing to this unease at the Pakistan stocks included the falling foreign exchange reserves and the anticipated rate hike in the forthcoming Monetary Policy Statement (MPS). These issues eroded investor confidence, prompting many to adopt a cautious approach and remain on the sidelines until there is greater clarity on both the political and economic fronts.
The Pakistan stocks pressure was evident as volumes on the main board remained subdued. However, the third-tier stocks saw healthier trading volumes, indicating selective interest in smaller, potentially less risky investments.
The KSE-100 index concluded the day at 41,950.32 points, down by 489.93 points. Key sectors that contributed to the negative performance included Banks (-108.8 points), Technology (-74.8 points), Cement (-72.1 points), Fertilizer (-56.2 points), and Chemical (-25.0 points).
Despite the overall Pakistan stocks decline, there was a notable increase in trading volumes. The volume of shares traded surged by 42.6% from 119.0 million shares to 169.7 million shares. Similarly, the average traded value saw a significant rise of 52.7%, reaching USD 27.1 million compared to USD 17.8 million the previous day.
Among the stocks that significantly contributed to the trading volumes were Pakistan Refinery Limited (PRL), Silkbank Limited (SILK), TPL Properties Limited (TPLP), Ghani Global Holdings Limited (GGL), and Cnergyico PK Limited (CNERGY).
The ongoing political turbulence and economic challenges underscore the need for a stable environment to restore investor confidence. The performance of Pakistan stocks on Tuesday serves as a stark reminder of the fragile state of the market and the urgent need for clarity and stability in Pakistan’s political and economic landscape.