PSX falls flat as stock market fails to hold control

KARACHI: The Pakistan Stock Exchange (PSX) started the trading session on a positive note on Wednesday but failed to hold ground and closed the day flat.

The indices lost control during final hour of trading. The KSE 100 index gained gaining 249.68 points and recorded its intraday high of 34,657.73 points. The bourse eventually closed flat by just 6.63 points at 34,401.42 points. The total volume of shares was 95.386 million valued at Rs5.577 billion.

The lower index KSE 30 index gained just 1.56 points and closed at 15,073.04 points. The total volume of scripts at the lower bourse dropped to 63.522 million. The KMI 30 index decreased by 69.52 points and settled at 55,236.09 points, while the KSE All-Share index increased by 8.83 points and ended at 24,677.11.

Out of total share traded, 128 advanced and 173 declined. The overall volumes declined from 221.04 million in last session to 129.95 million. TRG Pakistan (TRG +0.43%), Pak Elektron (PAEL +0.79%) and Pak Petroleum Limited (PPL +0.60%) were volume leaders of the day. The scripts had 7.76 million shares, 7.39 million shares and 6.96 million shares traded respectively.

The sectors driving the index downwards included fertilizer sector (-30.81 points), cement sector (-17.73 points) and pharmaceutical sector (-16.57 points). Engro Corporation (ENGRO -20.38 points), Habib Bank Limited (HBL -18.21 points) and Dawood Hercules (DAWH -12.76 points) were top points contributors.

The automobile assembling sector lost 1.4 percent from its cumulative market capitalization. Atlas Honda (ATLH -3.91%), Al-Ghazi Tractors (AGTL -2.39%), Millat Tractors Limited (MTL -1.35%) all closed negative.

Yesterday, the stock market rallied on the back of low inflation for the month of May and a decline in the interest rate on National Savings certificate. According to data released by Pakistan Bureau of Statistics (PBS), the inflation rate, measured by the Consumer Price Index (CPI), eased for the fourth successive month and stood at 8.2% in May 2020.

The government slashed profit rates on national saving schemes to 6.5 percent, which further fuelled the rally. This is the third time that saving rates have been revised downward this year.

These announcements strengthened investor sentiment but the trend did not continue the next day. Investors are expecting a business-friendly budget later this month amid the corornavirus pandemic.