On the first business day of the week, the Pakistan Stock Exchange’s (PSX) KSE-100 Index experienced a bearish trend, shedding 282.72 points. This marked a 0.36% decline, closing at 78,615.00 points, compared to the previous trading day’s close of 78,897.73 points, according to reports from a private news channel on Monday.
The day saw a total of 491,124,197 shares traded on the PSX, a notable decrease from the previous session’s volume of 743,072,057 shares. In monetary terms, the value of shares traded during the day stood at Rs. 10.124 billion, down from Rs. 12.900 billion on the last trading day.
Out of 443 companies that participated in trading on the PSX, 155 recorded gains, while 228 posted losses, and 60 remained unchanged. This widespread decline reflects the cautious sentiment prevailing in the market at the start of the week.
Despite Monday’s downturn, last week saw the PSX’s KSE-100 Index gain 0.45%, though it remained below the 79,000-point threshold. An AHL report from the previous week indicated that the benchmark index had shown a positive performance but was still under pressure to break through to higher levels.
On the last trading day of the previous week, Friday, the PSX showed a mixed trend with 52 stocks rising and several key contributors to the index’s gains, including KOHC (+10.0%), MARI (+1.31%), and BAFL (+2.11%). Their positive performance helped offset some of the overall market decline, contributing significantly to the index’s movement.
Market analysts are now focusing on the upcoming Financial Times Stock Exchange (FTSE) rebalancing event scheduled for September 20. Pakistan is expected to move from its current status as a secondary emerging market (EM) to a frontier market (FM). This shift could trigger substantial sell-side flows, as investors adjust their portfolios in response to the change in market classification. Despite the bearish trend on Monday, analysts remain optimistic, predicting that the KSE-100 Index will stay above the 78,000 mark and potentially move toward 80,000 points in the coming week, according to AHL’s outlook.
Several key economic indicators also played a role in the market’s recent performance. The week-on-week gain in the KSE-100 Index has been attributed, in part, to the August 2024 consumer price index (CPI) inflation numbers. CPI inflation for August stood at 9.6% year-on-year, a decrease from July’s figure of 11.1%, according to Topline Securities. This lower inflation rate likely provided some positive sentiment for investors, helping to cushion the index from sharper declines.
In addition to inflation, Pakistan’s trade deficit for August 2024 was recorded at US$1.68 billion, reflecting a 12% month-on-month decrease. The T-Bill auction during the week also attracted significant participation, with Rs1.618 trillion worth of bids received. The government successfully raised Rs835 billion, surpassing the target of Rs700 billion, while yields remained stable. These developments offered some support to the market, even as broader global economic concerns kept investors cautious.
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