KARACHI: Pakistan Stock Exchange (PSX) suffered its ninth highest YoY loss on Monday due to panic selling by nervous investors over concerns about the incoming government and the economy, dealers said. recorded and fell.
The benchmark KSE-100 stock index fell 1,878 points to its closing level of 61,065, down 2.98% from Friday’s previous close of 62,943 points.
Arif Habib Limited said in a note that the KSE-100 index remained in negative territory for two consecutive business days after the election, with a cumulative decline of $3,079 (down 4.8%).
In intraday trading, the benchmark index fell by 2,232.91 points or 3.55% to trade at 60,710 points.
Samiullah Tariq, head of research at Pak Kuwait Investment Company, said the loss was due to “uncertainty regarding government formation.”
On February 8, Pakistan held its 10th general election, with many Pakistan Tehreek-e-Insaf (PTI)-backed independent candidates winning.
The PSX initially plunged more than 2,000 points on Friday due to uncertainty over the outcome of the Feb. 8 general election.
However, the market recovered some of its losses by the end of the day, closing 1.87% lower at 62,943 points.
Market analysts such as Topline Securities’ Muhammad Sohail blamed the initial decline on the “unexpected” election result, which deviated from pre-election expectations.
This uncertainty triggered a massive sell-off, with the benchmark KSE-100 index down 3% at its lowest point.
Khurram Shehzad of Alpha Beta Core said that the index continued its downward trajectory on the second day after the election, but this was mainly due to the uncertainty surrounding the formation of a new government (hanging parliament). He said it could provide some direction, clarity and perspective in addressing pressing economic challenges. I am facing the country in front of me.
“In this regard, contrary to historical trends, the KSE100 fell for two consecutive sessions post-election, leading to a sharp decline in the value of the PSX,” Shehzad said.
According to Alpha Beta Core analysts, the market capitalization lost 214 billion rupees ($767 million) in each session, bringing the cumulative loss over the two sessions to 427 billion rupees ($1.53 billion). It is said that he did.
“Historically, the PSX has shown post-election jubilation, with the market rising 3-2% in the first two days after an election (2008, 2013, 2018 elections), but this time the market After that, it fell 4.7%.”
Shehzad said there is a further erosion of investor confidence and the trend is likely to continue, but that the winning political party has clearly defined an economic team with a plan and direction to address major economic challenges. The sooner a concrete decision is made, the sharper the market should recover.
Overall trading volume fell to 1.51 billion shares compared to Monday’s 1.89 billion shares. The stock trading value on that day was 29.09 billion rupees.
Shares of 386 companies were traded. Of these, 31 stocks rose, 351 stocks fell, and 4 stocks ended unchanged.
K-Electric Ltd was the top trading share with 341.06 million shares and fell by Rs 0.53 to close at Rs 5.30. Worldcall Telecom followed with 176.02 million shares, down 0.20 rupees to close at 1.70 rupees, and Cnergyico PK with 131.7 million shares, down 0.89 rupees to close at 5.01 rupees.
