Stocks succumb to selling pressure

Heavy selling swept through the Pakistan Stock Exchange (PSX) on Thursday as investor confidence took a beating in the face of concerns about foreign debt repayments and potential changes to the European Union (EU) Generalised Scheme of Preferences (GSP) Plus status. In the morning, trading opened on a positive note after a day's closure on account of Kashmir Solidarity Day and with modest buying the KSE-100 index reached its intra-day high of 112,234.15 points. However, soon afterwards, the index took a vertical slide. After some recovery, it remained on a downward trend and touched the intra-day low of 109,405.54 after midday. It finished trading down by nearly 1,650 points. There were worries about the possibility of reduced GSP Plus benefits for Pakistan that could impact trade relations and the businesses relying on preferential access to the EU markets. Ahsan Mehanti of Arif Habib Corp said that stocks closed sharply lower amid worries over prospects of foreign debt repayments and the EU review of the GSP Plus status. Dismal data of fertiliser sales for January 2025, the suspension of USAID support and prospects of CPEC projects primarily contributed to the bearish market, he added. At the close of trading, the benchmark KSE-100 index posted a loss of 1,634.22 points, or 1.46%, and settled at 110,301.16. Topline Securities, in its report, attributed the market's persistent negative sentiment to continuous institutional selling over the past week, which dented investor confidence. The drop was largely driven by Engro Holdings, Fauji Fertiliser Company, Mari Petroleum, Systems Limited and Pakistan Petroleum, which together contributed 675 points to the loss, it said. MCB Bank declared financial results, where it posted earnings per share of Rs53.35 with a cash payout of Rs9 per share, Topline added. Arif Habib Limited (AHL) mentioned in its review that a decisive break below the 112,000-115,500 range occurred after the holiday. On KSE-100, 26 shares rose while 72 fell. GlaxoSmithKline Pakistan (+2.88%), Cherat Cement (+1.35%) and Pakistan Tobacco (+2.24%) contributed the most to the index gains. On the other hand, Pakistan Oilfields (-6.86%), Mari Petroleum (-2.81%) and Systems Limited (-3.8%) were the biggest drags, it said. With the breakdown of the range below 112k, according to AHL, it is now the resistance against which bias is to the downside, targeting December 2024 lows. JS Global analyst Muhammad Hasan Ather said the market downturn was driven by profit-taking from institutions, political uncertainty and concerns about meeting the International Monetary Fund (IMF) targets. Key sectors such as banks, fertilisers and exploration & production (E&P) faced the brunt of selling. Looking ahead, the market is expected to remain range bound, with the upcoming IMF talks being a pivotal factor for future direction, Athar wrote. KTrade Securities, in its market wrap, reported that the lack of catalysts, combined with low volumes and ordinary results in line with expectations, led to the decline. The market was dragged down by weak performances in the E&P, banking, fertiliser and investment companies' sectors. It expected cyclical stocks and E&P companies to outperform once market sentiment improved. Overall trading volumes increased to 598.9 million shares against Tuesday's tally of 436.3 million. The value of shares traded during the day stood at Rs25.6 billion. Shares of 435 companies were traded. Of these, 101 stocks closed higher, 286 fell and 48 remained unchanged. Silkbank was the volume leader with trading in 119.5 million shares, rising Rs0.16 to close at Rs1.19. It was followed by WorldCall Telecom with 80.4 million shares, falling Rs0.06 to close at Rs1.52 and Bank Makramah with 64.9 million shares, gaining Rs0.39 to close at Rs4.15. During the day, foreign investors sold shares worth Rs226.4 million, according to the NCCPL.

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