KARACHI: Gloomy conditions persisted on the stock market on Monday as heightened political tensions forced nervous investors to extend their overnight profit-taking spell, dragging the benchmark index below 79,000.

The government’s announcement of banning the country’s largest political party following a landmark apex court verdict in favour of PTI in a reserved seat case has dealt a blow to investor sentiments. This reverses the bull run that propelled the PSX to scale an all-time high after reaching an agreement with the IMF for a new $7 billion credit line.

Furthermore, the deteriorating law and order situation, consistent demand from trade and industry leaders across the country to bring the cost of energy to a feasible level, and the reversal of harsh taxation measures have made the country’s economic outlook uncertain. The political instability after Fitch ratings has also raised questions about the continuation of the current government.

Ahsan Mehanti of Arif Habib Corporation said panic-selling in the earnings season, based on prevailing political noise, uncertainty over the settlement of China IPPs’ dues, and concerns about security unrest in the country, contributed to the bearish close.

In its report, Topline Securities Ltd said equities resumed the week on a negative note. Uncertain vibes from the political landscape, continuous institutional selling, and the first day of rollover week can be accredited for the selling spree.

During the session, blue-chip stocks like Hub Power, Engro Corporation, Fauji Fertiliser, Oil and Gas Development Company and Pakistan Petroleum cumulatively wiped out 495 points from the index.

Conversely, Sui Northern, HBL and Avanc­eon Ltd added 44 points. As a result, the benchmark index hit an intraday high of 80,085.63 points and a low of 78,404.76. However, the index settled at 78,539.19 after losing 1,578.70 points or 1.97 per cent on a day-on-day basis.

The overall trading volume dipped 21.58pc to 375.59 million shares. The traded value also plunged by 30.52pc to Rs19.35bn on a day-on-day basis.

Stocks contributing significantly to the traded volume included K-Electric (33.44m shares), Pak Elektron (23.55m shares), PIA Holding Co (19.20m shares), WorldCall Telecom (18.44m shares) and Sui Northern Gas (15.15m shares).

The market saw aggressive buying from foreign investors as they bought shares worth $3.74m.

Published in Dawn, July 23rd, 2024