KARACHI: Bears held their grip over the Pakistan Stock Exchange (PSX) on Tuesday, as the index extended losses from the previous session and recorded a decline of nearly 960 points. 

Experts said the market succumbed to profit-taking as the devaluation of the rupee and prevailing volatility on the political front dented investor sentiment.

Trading began its descent within the initial hour as stocks nosedived due to an uncertain political outlook ahead of the National Assembly dissolution and expected delay in the general elections, which fuelled bearish sentiment, pulling the stocks below the 47,500-point mark.

Bearish sentiment deepened with market anticipation of a new refinery policy and expected release of Rs415 billion for circular debt payment.

Due to a lack of positive triggers, investor confidence was further shaken, resulting in the KSE-100 index witnessing profit-taking in index-heavy sectors and touching an intra-day low of 47,335.32. 

The index fell steadily throughout the session, dipping almost 960 points to close the day in red below the 47,500-point mark.

“Stocks closed sharply lower on political noise amid uncertainty over the appointment of a caretaker government setup and falling rupee,” said Arif Habib Commodities CEO Ahsan Mehanti.

“Unresolved circular debt crisis of over Rs3 trillion and hike in power tariff impacting industrial payouts played the role of a catalyst in the bearish close.”

At close, the benchmark KSE-100 index registered a decrease of 956.43 points, or 1.98%, and settled at 47,429.82.

Topline Securities, in its report, stated that the KSE-100 index declined by 2% (most in percentage terms after January 17, 2023).

“This decline can be attributed to investors’ preference to book gains as the current coalition government term comes to an end, where investors want to see if the caretaker government will continue with economic reforms that the government undertook after the SBA with the IMF”.

There was also no further clarity on the circular debt after a meeting last week on the issue chaired by FM Ishaq Dar regulatory reforms weighed down on investor sentiment, Topline added.

Arif Habib Limited (AHL) reported that 48,000-points proved to be pivotal and trade below saw downside momentum accelerate.

“The correction that we had been anticipating since the market hit 49,000 is here but will soon subside,” it said.

The Oil & Gas Development Company (-7.31%), Pakistan Petroleum (-7.0%) Habib Bank (-2.19%), and Pakistan State Oil Company (-7.17%) weighed heaviest on the index.

JS Global analyst Muhammed Waqar Iqbal commented that the KSE-100 experienced downward pressure, primarily due to the absence of a decision regarding cash dividend payments for Exploration & Production (E&P) companies.

Profit-taking was observed across various other sectors as well, forcing the key index to end the day in the red, he said.

“Going forward, we recommend investors to avail any downside as an opportunity to buy in the construction and E&P sectors,” the analyst added.

Overall trading volumes increased to 336.1 million shares compared with Monday’s tally of 381.9 million. The value of shares traded during the day was Rs12.5 billion.

Shares of 343 companies were traded. At close, 49 stocks closed higher, 278 declined and 16 remained unchanged.

Cnergyico PK was the volume leader with trading in 28.3 million shares, losing Rs0.33 to close at Rs3.47 It was followed by Oil & Gas Development Company with 27.8 million shares, losing Rs7.72 to close at Rs97.85 and K-Electric with 24.6 million shares, losing Rs0.13 to close at Rs2.1.

Foreign investors were net buyers of Rs 177.5 million worth of shares, according to the NCCPL.

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