Karachi: The Pakistan Stock Exchange (PSX) opened the trading week on a negative note on Monday, as investors’ cautious strategy, profit-taking and selling pressure in major stocks pushed the market lower. At the close of trading, the benchmark KSE-100 index closed at 178,414.80 points after a decline of 1,156.47 points, while the KMI-30 index fell significantly by 2,525.45 points to 254,200.25 points.
Investors did see limited buying in the early session, but selling pressure increased after noon, pushing almost all major sectors into the negative zone. The decline in prominent shares of the energy, fertilizer, banking and oil and gas sectors had a significant impact on the overall index.
The KSE-100 index opened the day at 179,457.85 points, while it touched a high of 180,272.02 points during the session. However, as investors rushed to book profits, the index fell to a low of 178,331.00 points and finally closed at 178,414.80 points, down 0.64 percent from the previous session.
Similarly, the KMI-30 index, comprising Shariah-compliant companies, opened at 256,679.08 points, touched a high of 257,202.34 points during the session, but later fell to a low of 254,063.70 points due to heavy selling. The index closed at 254,200.25 points, down 0.98 percent.
Investors also appeared cautious in terms of trading volume. The total volume of companies included in the KSE-100 index stood at 330.97 million shares, while 128.37 million shares were traded in the KMI-30 companies.
Although Monday’s session was negative, the overall performance of the market is still considered strong on a year-on-year basis. The KSE-100 index has maintained significant gains with a gain of 42.02 percent since the beginning of the financial year, while it has increased by 2.51 percent on a calendar year-to-date basis.
Similarly, the KMI-30 index has maintained a positive performance of 37.49 percent since the beginning of the financial year and 2.28 percent during the calendar year, which shows that despite the recent decline, the long-term trend has not completely changed.
The stocks that had the biggest negative impact on the market were Fafi Fertilizer Company (FFC), Hub Power Company (HUBC), Oil and Gas Development Company (OGDC), Lucky Cement (LUCK) and Pakistan Petroleum Limited (PPL). These companies collectively lost hundreds of points from the index, which put the benchmark index under pressure.
On the other hand, a few companies also tried to support the market. International Industries (ILP), Engro Holdings (ENGROH), Kohat Cement (KOHC), Dawood Hercules (DCR) and International Steel (ISL) were among the prominent stocks that showed positive performance, however, their impact could not prove sufficient to stop the overall decline.
In the KMI-30 index too, ENGROH, PAEL and GAL provided positive points, but the significant declines of HUBC, FFC, OGDC, LUCK and PPL limited these gains.
According to market experts, Monday’s decline can be mainly attributed to profit-taking, as the Pakistan stock market has been witnessing a continuous rally for the past several weeks. In such situations, investors usually prefer to sell to secure their profits, which creates time pressure.
Analysts say that the fundamental direction of the market will still be influenced by economic indicators, interest rates, fiscal policy, foreign investment and corporate results. If economic indicators remain good in the coming days, there is a possibility of investor confidence being restored.
A section of investors is also keeping an eye on the upcoming quarterly financial results and earnings of companies, as these factors will play an important role in future investment decisions. Apart from this, global commodity prices, the crude oil situation and fluctuations in the value of the rupee are also considered important elements determining the direction of the market.
The current trend of the market shows that investors are now focusing mainly on strong companies despite short-term fluctuations. Although Monday’s trading session was negative, the significant positive returns on a year-on-year basis indicate that investor confidence in the Pakistan Stock Exchange has not completely disappeared.
According to analysts, if the buying trend strengthens again in the next few sessions, the market may recover some of the recent losses; however, there is also a possibility of volatility in the short term as investors await new economic developments and corporate announcements.
