The Pakistan Stock Exchange (PSX) endured a tumultuous session on Tuesday as the benchmark KSE-100 index surrendered to selling pressure ahead of the bourse’s Morgan Stanley Capital International’s (MSCI) reclassification which was being moved to the Frontier Markets Index.

Similar to global equity markets, PSX remained under pressure as foreign investors resorted to heavy selling.

Furthermore, investor confidence dipped further as the Pakistani rupee (PKR) continued its depreciation despite the revival of the International Monetary Fund (IMF) loan program.

Trading started with a hike as the benchmark index climbed closer to the 46,000-point mark. However, the rally dwindled later on as investors started cherry-picking stocks.

For the remaining part of the session, volatility continued and the index stayed under pressure. Towards the end of the day, a buying spree recovered some of the losses.

Towards closing, the KSE-100 index recorded a drop of 257.67 points, or 0.57%, as it settled at 45,072.38.

Arif Habib Limited stated in its report that on the day of MSCI’s reclassification, the KSE-100 index closed the session above the 45,000 points after having a volatile session as it made a risky move of over 1,000 points.

The exploration and production sector garnered considerable attention following news that the government was considering lowering the circular debt by declaring dividends for the shareholders of energy sector companies.

According to data compiled by the National Clearing Company of Pakistan, foreign institutional investors were net sellers of Rs10.2 billion worth of shares during the trading session.

During the last two trading hours, institutional investors collected stocks across the board as it was the last opportunity to catch the foreign selling spree owing to the transition of Pakistan’s bourse from emerging to frontier markets. Major board stocks recorded hefty trading volumes.

Sectors that contributed to the performance include commercial banks (-160 points), fertilizer (-78 points), investment banks (-18 points), fast-moving consumer goods (-16 points), and textile composite (-13 points).

Analyst at JS Global Waqar Iqbal noted that foreign flows were the focus during Tuesday’s session where MSCI-related stocks were the most prominent. The market observed healthy activity from foreigners as well as locals.

The top five contributors in terms of traded volume were Habib Bank Limited, MCB Bank, United Bank Limited, TRG Pakistan, and Hub Power Company. Total traded volumes were 412 million shares.

The analyst added, “Going forward, details of realization of the Saudi Arabian package and IMF agreement will decide the market’s direction”.

Overall trading volumes jumped to 411.5 million shares compared to Monday’s tally of 268.2 million. The shares traded during the day were valued at Rs34.8 billion.

Shares of 345 companies were traded. Towards the end of the day, 125 stocks closed higher, 198 declined and 22 remained unchanged.

Habib Bank led the volume chart with 31.5 million shares, dropping Rs1.81 to close at Rs123.35. It was followed by First National Equities with 22.3 million shares, losing Rs0.23 to close at Rs10.76 and United Bank with 20.8 million shares, losing Rs2.45 to close at Rs141.25.


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