Shares at PSX shed nearly 200 points on geopolitical tensions

Published September 30, 2024
Selling pressure witnessed at the Pakistan Stock Exchange (PSX) — PSX data portal
Selling pressure witnessed at the Pakistan Stock Exchange (PSX) — PSX data portal

Shares at Pakistan Stock Exchange (PSX) traded in the red on Monday, shedding nearly 200 points.

The benchmark KSE-100 index plunged 730.69 points, or 0.9 per cent, to stand at 80,561.44 points from the previous close of 81,292.13 points at 1:23pm. The index closed at 81,114.20, down by 177.93 points, from the previous close.

Awais Ashraf, director research at AKD Securities, noted that the “selling pressure in two major stocks, Hub Power and Mari Petroleum, is weighing down the index”.

“Hub Power’s decline is attributed to the threat of revision of power plant contracts, while Mari Petroleum is under pressure following the distribution of bonus shares to investors,” he said.

“Despite this, we anticipate that the approval of the IMF Extended Fund Facility will have a positive impact on the economy, as it ensures that the external account remains fully funded,” he added on a positive note.

He observed the such a development could lead to further monetary easing and subsiding inflationary pressure, adding that investor interest was likely to “remain focused on stocks with higher dividend yields and those poised to benefit from monetary easing”.

Meanwhile, Shahab Farooq, research director at Next Capital Limited, attributed the bearish momentum to the “overall situation in [the] Middle East making investors nervous”.

Regional tensions in the Middle East have amped up geopolitical uncertainty after Israel assassinated Hassan Nasrallah, the top leader of Lebanese group Hezbollah, on Saturday. It continued its attacks on Monday, killing a Hamas figure as well as three Palestinian leaders in Lebanon.

Moreover, the US has also indicated it was increasing its air support capabilities in the Middle East and putting troops on a heightened readiness to deploy to the region.

Meanwhile, share markets turned hesitant in the Asian region as strife in the Middle East offset more policy measures in China, while the Nikkei dived on concerns Japan’s new prime minister favoured normalising interest rates.

The stimulus rush in China did help outweigh a poor manufacturing survey and lift the blue-chip CSI300 another 7.7pc, having already jumped 16pc last week.

Continued Israeli strikes across Lebanon added geopolitical uncertainty to the mix, though oil prices were still restrained by the risk of increased supply.

The week is packed with major US economic data including a payrolls report that could decide whether the Federal Reserve delivers another outsized rate cut in November.

The Nikkei led the early action with a dive of 4.6pc as investors anxiously waited for more direction from new Prime Minister Shigeru Ishiba, who has been critical of the Bank of Japan’s easy policies in the past. However, he sounded more conciliatory over the weekend saying monetary policy “must remain accommodative” given the state of the economy.

Major stock markets in the Gulf also fell in early trade amid rising tensions in the region, with the Saudi index on course to extend losses a day after it snapped a seven-day winning streak.

Saudi Arabia’s benchmark index eased 0.1pc, with Saudi National Bank, the country’s biggest lender, falling 0.7pc.

Dubai’s main share index dropped 0.3pc, hit by a 0.6pc drop in blue-chip developer Emaar Properties and a 0.5pc decrease in top lender Emirates NBD.

In Abu Dhabi, the index fell 0.4pc.


More to follow

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

From hard to harder

From hard to harder

Instead of ‘hard state’ turning even harder, citizens deserve a state that goes soft on them in delivering democratic and development aspirations.

Editorial

Canal unrest
Updated 03 Apr, 2025

Canal unrest

With rising water scarcity in Indus system, it is crucial to move towards a consensus-driven policymaking process.
Iran-US tension
03 Apr, 2025

Iran-US tension

THE Trump administration’s threats aimed at Iran do not bode well for global peace, and unless Washington changes...
Flights to history
03 Apr, 2025

Flights to history

MOHENJODARO could have been the forgotten gold we desperately need. Instead, this 5,000-year-old well of antiquity ...
Eid amidst crises
Updated 31 Mar, 2025

Eid amidst crises

Until the Muslim world takes practical steps to end these atrocities, these besieged populations will see no joy.
Women’s rights
Updated 01 Apr, 2025

Women’s rights

Such judgements, and others directly impacting women’s rights should be given more airtime in media.
Not helping
Updated 02 Apr, 2025

Not helping

If it's committed to peace in Balochistan, the state must draw a line between militancy and legitimate protest.