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Friday, February 3, 2023
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Political uncertainty swipes off 786 points from KSE-100

Failing to sustain early gains, the Pakistan Stock Exchange (PSX) closed the first session of the week in red, with the benchmark KSE-100 Index diving below the 45,000-mark intraday

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Stock Market went bearish on Monday as investors sold their shares in the wake of political uncertainty. It caused KSE-100 to go down by almost 800 points.

Initially, following the Prime Minister’s successful vote of confidence on Saturday, the market traded in a wide range moving between 595 and 988 points during the day.

However, macroeconomic concerns overshadowed the optimism of the political news and sent the investors to the exit door and they dumped their stocks, showing a decline in investment.

Read More: High global oil prices may trigger Pakistan’s economic crisis

Reasons including, rising commodity prices, increasing inflation, widening trade deficit caused concern about the future of economic stability.

Earlier on Monday, the stock trading began with an upwards trend, but by midday, some of the gains were wiped off. The bearish mood of the investors led to the deepening of the decline by the end of the day.

At the closing time, the KSE-100 recorded a decrease of 1.72%, losing 786.29 points, leading to the market ending at 45,051.06 points.

Arif Habib Limited, in its report, stated that in the aftermath of PM’s vote of confidence from parliament, the market endured a heavy drawdown with an oscillation of 1,583 points, posting an increase of 595 points in the early part of the session and dropping by 988 points in intra-day trading.

The political uncertainty in Punjab, caused by the possible reshuffle of the political and administrative setup of the biggest province in the country probably worried the investor. Simultaneously, the recent jump in inflation and the soaring prices of crude oil in the global market made investors have expectations about the future that required being careful, which in return impacted stocks.

This uncertainty impacted cement, steel, and oil and gas marketing companies during the day.

Over the weekend, the increase in international crude oil prices helped exploration and production sector stocks to stay afloat, however, selling pressure in other stocks put pressure on Oil and Gas Development Company and Pakistan Petroleum Limited as well.

Sectors that painted the benchmark index red included cement (-204.47 points), banking (-103.46 points), and power generation & distribution (-66.59 points). Among the companies, Lucky Cement Ltd (LUCK -84.48 points), Hub Power Company Ltd (HUBC -48.22 points), and Habib Bank Ltd (HBL -38.89 points) dented the index the most.

Shedding 3.75pc from its cumulative market capitalization, the cement sector ended as the session’s worst performer, with Lucky Cement Ltd (LUCK -3.26pc), DG Khan Cement Company Ltd (DGKC -5.30pc), and Bestway Cement Ltd (BWCL -4.34pc) posting significant losses.

Read More: Government’s priority is to control the prices of necessities-Minister

Meanwhile, in a notification to the exchange, Hub Power Company Ltd (HUBC -2.50pc) announced “HUBC and its wholly-owned subsidiary Hub Power Holdings Ltd together with ENI’s local employees (in a 50:50 joint venture) have executed definitive agreements to acquire all upstream operations of Eni & renewable energy assets owned by Eni in Pakistan”.

According to data compiled by the National Clearing Company of Pakistan, Foreign institutional investors were net buyers of Rs445.7 million worth of shares during the trading session.