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KSE-100 Index Dips Below 78,000 Amid Lack of Positive Market Triggers
On Wednesday, the Pakistan Stock Exchange’s (PSX) KSE-100 Index continued its recent downward trend, closing marginally lower at 77,992.78, a decline of 91.45 points or 0.12%. Despite early gains, the index could not sustain its momentum, reflecting the broader market’s struggle to find positive triggers.
The trading session began on a positive note, with the KSE-100 reaching an intra-day high of 78,334.61. However, the upward trend was short-lived as selling pressure emerged in the latter part of the session. While bulls attempted to regain control in the second half, the market ultimately succumbed to late-session selling, leading to the index’s decline.
Topline Securities, in its post-market report, noted that the day began with a bearish sentiment, although there was some positive momentum later. However, the market couldn’t sustain this trend, reflecting the cautious approach of investors.
Sectoral Performance and Market Movers
Several key players in the market contributed to the day’s decline. BAHL, HINOON, PKGS, MCB, and HUBC collectively lost 104 points, pushing the index lower. On the flip side, companies like MARI, ENGRO, and FFC saw some buying interest, collectively adding 162 points to the index. Despite these gains, the overall market trend remained negative.
Ismail Iqbal Securities also highlighted the market’s volatility throughout the session, attributing the lackluster performance to a dearth of positive triggers. Investors were seen waiting for fresh developments, particularly concerning the much-anticipated $7 billion bailout program from the International Monetary Fund (IMF).
Ongoing Economic Developments
Tuesday’s trading session also ended on a bearish note, marking the second consecutive day of losses for the PSX. The KSE-100 index fell by 487 points, bringing the total loss for the week to over 800 points. The market’s performance underscores investors’ anxiety as they await significant economic news, such as the IMF bailout approval.
In a related economic update, State Bank of Pakistan (SBP) Governor Jameel Ahmad revealed that Islamabad is in the advanced stages of securing $2 billion in additional external financing, a prerequisite for the IMF’s approval of the bailout program. Furthermore, Pakistan aims to raise up to $4 billion from Middle Eastern commercial banks by FY26.
Positive Ratings Amid Market Woes
Despite the ongoing challenges, there was a silver lining as Moody’s Ratings upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa2 from Caa3. This upgrade, coupled with a positive outlook for the Government of Pakistan, could serve as a much-needed boost for investor confidence in the coming days.
Corporate Earnings Highlights
In corporate news, Faysal Bank reported a consolidated profit after tax of Rs6.95 billion for the quarter ended June 30, 2024, marking a significant 60% increase compared to the Rs4.35 billion recorded in the same period last year. However, Pakistan Telecommunication Company Limited (PTCL) faced a different reality, reporting substantial losses of Rs3.4 billion during the same period, compared to a loss of Rs2.1 billion in the previous year.
Global and Local Market Dynamics
Globally, stocks remained near record highs on Wednesday, with markets closely watching Nvidia’s performance as it dominates the AI computing hardware market. Meanwhile, Japan’s Nikkei fell by 0.2%, and oil prices retraced recent gains due to concerns over Chinese demand, with Brent crude futures trading just below $80 a barrel.
On the currency front, the Pakistani rupee registered a slight decline against the US dollar, closing at 278.45, a depreciation of 0.05%.
Volume and Market Activity
Market activity saw a marginal increase in trading volume, rising to 636.02 million shares from 591.51 million on Tuesday. However, the value of shares traded decreased to Rs16.27 billion from Rs17.12 billion in the previous session. Kohinoor Spinning led the volume chart with 124.73 million shares, followed by Fauji Foods Ltd with 39.28 million shares, and Yousuf Weaving with 34.90 million shares.
