The stock market endured a bearish week as developments on domestic and international fronts led to a decline of 1.9% or 791 points in the benchmark PSX KSE-100 index which settled at 40,869 points.
As the country was facing economic uncertainty, investors were hopeful of financial inflows following Prime Minister Imran Khan’s international trips. However, due to a lack of news on that front and absence of other positive triggers, the KSE-100 continued to take a beating.
At the start of the week, the trading kicked off on a negative note as investors resorted to profit-taking amid deteriorating foreign exchange reserves and anti-Pakistan comments by the US president.
Tuesday fared no better and the PSX index remained choppy in the wake of failure of talks between Pakistan and the International Monetary Fund (IMF) for a bailout package.
Although Saudi Arabia announced the release of $1 billion worth of assistance under its financial package, the news failed to generate any euphoria as the overall mood remained tense.
Finance Minister Asad Umar said the government would not sign any agreement with the IMF under pressure and was not in a hurry for the package as alternative arrangements had been made to address immediate financing needs.
A latest Fitch report added to the poor sentiments. Fitch Solutions pointed out that Pakistan had been living beyond its means for several years as evident from its widening current account and trade deficits.
Additionally, selling pressure in exploration and production (E&P) stocks due to sliding international crude oil prices also dented the index, dragging it below the 41,000 mark.
The market activity remained dull during the week with average daily traded value declining 23% to $56 million while average daily volumes dropped 26% to 157 million shares.
In terms of sectors, negative contribution came from oil and gas exploration companies (down 329 points) amid weakening international crude oil prices, commercial banks (278 points) as concerns of higher interest rates during the period of IMF bailout waned to an extent, oil and gas marketing companies (72 points) and fertiliser producers (59 points).
According to Elixir Securities, the E&P sector contributed 42% to the decline in the KSE-100 index as it was down 4.8% week-on-week due to lower global crude prices on the back of supply glut fears.
On the other hand, positive contribution was led by the cement sector (up 53 points) and chemical sector (up 21 points). Scrip-wise, Habib Bank (up 219 points), Pakistan Oilfields (119 points), Oil and Gas Development Company (96 points), Pakistan Petroleum (82 points) and United Bank Limited (36 points) contributed positively to the index.
