Stock market witnesses continuous decline on selling pressure

Stock market witnesses continuous decline on selling pressure

KARACHI: The stock market witnessed another fall of 314 points on Thursday over concerns related to inflationary pressure and monetary tightening.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 33,774 points as against 34,089 points showing a decline of 314 points.

Muhammad Faizan Munshey, Head of Foreign Institutional Sales at Next Capital Limited said that the benchmark KSE 100-share index continued its slump on Thursday, dropping another 314.14 points to settle at 33,774.42.

“The brutal sell-off is being fuelled by mounting investor concerns over the outlook on inflation and interest rates, which could curtail growth in the economy and have a damaging knock-on effect,” he said.

Pak Rupee continues to drop against the dollar. The US Dollar hit all-time high of 164.5 against the Pak Rupee in early trade in the interbank bank.

However, some respite was witnessed later in the day and the Dollar came down to 163.35.

Analysts at Arif Habib Limited said that the down trend in market continues amidst repo activity.

Despite the absence of MTS volume, market remained under selling pressure.

Power sector led the volumes on the bourse with 33M shares, followed by Banks (19 million).

KEL remained on the top consecutively on the second day with 24 million shares, which is followed by PAEL (7 million).

Banking sector saw price erosion in HBL and UBL, with HBL taking the major toll and reaching recent lows.

Similarly, stocks that have potential negative effect due to increase in Rupee:Dollar parity performed poorly.

While those stocks which have positive impact emanating from high parity failed to grab investors’ interest due to weak macroeconomic fundamentals.

Sectors contributing to the performance include Fertilizer (-80 points), E&P (-76 points), Commercial Banks (-58 points), Cement (-30 points) and Power Generation (-24 points).

Volumes decreased from 159.6 million shares to 135.0 million shares (-15 percent DoD). Average traded value also decreased by 7.5 percent to reach US$ 27.9 million as against US$ 30.1 million.

Stocks that contributed significantly to the volumes include KEL, PAEL, FFBL, BOP and MLCF, which formed 37 percent of total volumes.

Stocks that contributed negatively include PPL (-44 points), FFC (-40 points), HBL (-35 points), HUBC (-29 points) and ENGRO (-23 points).

Stocks that contributed positively include INDU (+10 points), MEBL (+9 points), FATIMA (+8 points), ABOT (+7 points) and HMB (+7 points).