Pakistan stocks saw a decline of 94 points on Monday as investors reacted cautiously to the impending monetary policy announcement. The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) closed at 44,924 points, down from Friday’s closing of 45,018 points.
Market analysts at Arif Habib Limited attributed the dip to a range-bound session, driven by uncertainty surrounding the Monetary Policy Committee (MPC) meeting. Investors took a wait-and-see approach, leading to limited activity across the main board. The stocks remained lackluster on the first day of the roll-over week, as traders refrained from making significant moves ahead of the policy decision.
Despite the overall decline, some buying interest emerged during the final hour of trading, as corporate earnings reports encouraged selective value buying. However, the positive momentum was not strong enough to offset the losses incurred earlier in the day.
Sector-wise Performance
Key sectors, including technology and cement, were among the major contributors to the Pakistan stocks decline. The technology sector alone shaved off 71.9 points from the index, while cement followed with a 24.6-point drop. Other sectors that negatively impacted the market were commercial banks (-17.5 points), engineering (-9.1 points), and investment banks (-6.8 points).
The subdued performance of these sectors reflected concerns over the possible monetary policy adjustments that could affect liquidity, borrowing costs, and future earnings potential. Market participants are particularly sensitive to the central bank’s policy changes, which could have a direct impact on inflation, interest rates, and overall economic growth.
Trading Volumes and Values
Trading volumes on the PSX also witnessed a decline, falling by 9% to 160.2 million shares, down from 176.1 million shares traded on Friday. The traded value decreased even more sharply, dropping by 18.8% to US$ 32.5 million, compared to US$ 40.1 million in the previous session. The lower volumes and values reflected the cautious sentiment in the market, as investors opted to hold off on significant trades.
The most active stocks during the session included CNERGY, TRG, HASCOL, WTL, and HUMNL, which collectively contributed significantly to the overall volume. However, most of these stocks were from the 3rd tier, indicating that investors focused on lower-priced, speculative plays rather than blue-chip stocks.
Outlook
As the market digests the upcoming monetary policy announcement, analysts expect cautious trading to continue in the coming days. Investors are likely to remain on edge, particularly in sectors sensitive to interest rates and inflation. However, corporate earnings reports could provide some relief if results exceed market expectations. The overall sentiment remains uncertain, with the direction of the market largely dependent on the central bank’s policy stance.
