Thin gains at PSX as Pak-Iran tensions ease

Shares at the Pakistan Stock Exchange (PSX) reversed trend on Friday as investors made significant buying initially but gave up most of the gains by the close of trading despite easing of border tensions between Pakistan and Iran.

As trading got underway in the morning, the KSE-100 index spiked in the initial hour as a sense of relief prevailed after diplomatic engagements between Pakistan and Iran over airspace violations.

A healthy buying spree took the index to the intra-day high at 63,911.85 points earlier in the day. However, a heavy spell of profit-taking erased most of the increase of over 700 points in the later part of the day. As a result, the bourse ended with thin gains of nearly 80 points.

“Stocks showed recovery amid thin trading as investors weighed the stronger rupee and positive outcome of a $3 billion investment pact with Dubai,” said Arif Habib Corp MD Ahsan Mehanti.

“Election Commission’s affirmation of polls taking place on February 8, surging global crude prices and robust economic indicators including a $397 million current account surplus, $2.38 billion in remittances, $65 million worth of foreign portfolio investment and $2.8 billion in exports in December played the role of catalysts in positive close of the market,” he said. At close, the benchmark KSE-100 index recorded an increase of 79.83 points, or 0.13%, and settled at 63,282.23.

Topline Securities, in its report, noted that the KSE-100 index opened on a positive note and jumped to the intra-day high of 710 points. “This positivity during the first half of trading can be attributed to the ease in tensions between Pakistan and Iran,” it said.

However, investors preferred to book profit on the intra-day gains amid uncertainty about upcoming elections. The index declined during the second half and closed at 63,282, up 0.13%, Topline added.

Read PSX witnesses sharp dip amid Pak-Iran escalation

Arif Habib Limited (AHL), in its review, stated “Pakistani stocks lost 2.1% week-on-week as the tight consolidation broke to the downside.” The market on Friday again faced resistance at 64k, which kept the index between 63k and 64k, it said.

Biggest contributors were Engro (+1.68%) and Mari Petroleum (+1.11%) while Bank AL Habib (-0.98%) and Sui Northern Gas Pipelines (-2.52%) were the main drags.

“Several positive news flows were overshadowed by the Pak-Iran situation,” AHL wrote. Overall trading volumes decreased to 287.3 million shares against Thursday’s tally of 445.8 million. Shares of 339 companies were traded. Of these, 160 stocks closed higher, 158 dropped and 21 remained unchanged.

K-Electric was the volume leader with trading in 49.8 million shares, losing Rs0.03 to close at Rs5.44. It was followed by Pakistan International Airlines Corp with 43.4 million shares, gaining Rs0.48 to close at Rs12.04 and Pakistan Telecommunication Co with 14.2 million shares, losing Rs0.43 to close at Rs13.83.

Foreign investors were net buyers of shares worth Rs230.3 million.

Published in The Express Tribune, January 20th, 2024.

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