Border tensions spark sell-off at PSX
Shares of 345 companies were traded. At the end of the day, 75 stocks closed higher, 254 declined and 16 remained unchanged. PHOTO: FILE
Listen to article
The Pakistan Stock Exchange (PSX) on Thursday nosedived over 2,200 points as escalating border tensions between Pakistan and India sparked investor anxiety. A heated war of words and airspace restrictions heightened fears of regional instability.
The unfolding situation triggered a broad-based sell-off as market participants rushed to reduce exposure in a volatile environment. The KSE-100 index plunged to the intra-day low of 114,661 soon after the commencement of trading, but it recovered quickly and rose to the intra-day high of 116,568. It started losing ground again and closed with a sharp loss of 2,206 points.
Pressure from the futures rollover week and caution ahead of major corporate earnings announcements also pushed the market down. Heavyweights such as power, oil and bank stocks led the slump. Despite the sell-off, some buying interest was seen in oil and automobile stocks.
According to Arif Habib Corp MD Ahsan Mehanti, stocks fell across the board as investors feared an escalation in tensions following India's action post-attacks in occupied Kashmir. Additionally, a weak rupee and concerns over trade ties triggered a bearish close at the PSX, he said.
At the end of trading, the benchmark KSE-100 index recorded a sharp fall of 2,206.33 points, or 1.88%, and settled at 115,019.82.
Topline Securities wrote in its commentary that sentiment soured at the bourse as the KSE-100 index extended its previous day's losses. Weighed down by escalating regional tensions between India and Pakistan and the conclusion of futures rollover week, the market adopted a risk-off tone.
The benchmark index touched the intra-day low of 2,564 points before closing down by 2,206 points. Negative contribution mainly came from Hub Power, Engro, Mari Petroleum, Bank Alfalah and UBL, it said.
Despite the widespread bearish activity, Pakistan State Oil led trading with a value of Rs2.36 billion. Besides, Pakistan Tobacco reported Q1 earnings per share (EPS) of Rs24.53, Topline added.
Arif Habib Limited (AHL), in its review, wrote that the "Tariff Gap" was replaced by the "Indus Waters Treaty Gap," marking two bearish gap-down openings in April. "These can be contrasted with the bullish International Monetary Fund (IMF)-driven gaps seen in 2023."
Market breadth remained weak as only eight stocks closed higher while 89 declined. The largest negative contribution came from Hub Power (-2.91%), Bank Alfalah (-3.54%) and Mari Petroleum (-2.38%). On the positive side, Pakgen Power (+9.73%), Pakistan Tobacco (+1.69%) and Unilever Pakistan Foods (+1.96%) defied the downtrend, it said.
Fauji Cement reported 9MFY25 EPS of Rs3.84, representing a 34% year-on-year (YoY) increase, but results came in below market expectations. Faysal Bank announced 1QCY25 EPS of Rs3.60, down 18% YoY, which was in line with estimates.
KTrade Securities said in its market wrap that the ongoing border tensions between Pakistan and India dented market sentiment, leading to a sell-off across the board. Pakistan has responded to Indian aggression with countermeasures, including closing the airspace and the Wagah border and rejecting the suspension of Indus Waters Treaty.
Banking, oil and gas, fertiliser and cement sectors were the top contributors to the index's decline, with Engro, Hub Power, Bank Alfalah, Mari Petroleum, Fauji Fertiliser, MCB Bank and UBL leading the charge, KTrade observed.
JS Global analyst Muhammad Hasan Ather said the KSE-100 index dropped 1.9% amid rising geopolitical tensions and fears over the futures rollover week and earnings season. Despite a brief midday recovery, the index witnessed heightened selling pressure that forced investors to remain cautious.
Overall trading volumes decreased to 506.7 million shares as compared with Wednesday's tally of 605.2 million. The value of shares traded during the day was Rs24.5 billion. Shares of 456 companies were traded. Of these, 83 stocks closed higher, 339 fell and 34 remained unchanged.
Power Cement led the volume chart with 37.3 million shares, rising Rs0.25 to close at Rs14.45. It was followed by WorldCall Telecom with 31.2 million shares, falling Rs0.02 to close at Rs1.31 and Sui Southern Gas Company with 23.4 million shares, falling Rs0.06 to close at Rs41.05. During the day, foreign investors bought shares worth Rs638 million, the National Clearing Company reported.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
6 hours ago
- Express Tribune
Pakistan's power capacity hits 46,605 MW, idle plant costs burden consumers
The country has witnessed an increase in electricity generation installed capacity during the ongoing financial year 2024-25, placing an additional burden on consumers. The capacity payments have been a result of an increase in electricity generation installed capacity, which touched 46000 MW. The consumers have been paying Rs 2.5 to Rs 2.8 trillion every year, which they pay to idle plants that have not been producing a single unit. According to the Economic Survey 2024-25 released here on Monday, as of July–March FY2025, Pakistan's total installed electricity generation capacity stood at 46,605 MW, reflecting a 1.6 percent increase compared to 45,888 MW recorded during the corresponding period of FY2024. The government said that this increase is primarily attributed to the addition of 2,813 MW through net metering. However, the Government of Pakistan terminated Power Purchase Agreements (PPAs) with several Independent Power Producers (IPPs)—notably HUB Power, Lalpir Power, Pakgen Power, Rousch Power, Saba Power, and Atlas Power—effective October 1, 2024. The percentage shares of generation capacity by source were: hydel (24.4%), nuclear (7.8%), renewable (12.2%), and thermal (55.7%). Although thermal power remains the dominant source, its share has declined in recent years, indicating an increasing reliance on indigenous energy sources. Out of the total electricity generation of 90,145 GWh, the combined share of hydel, nuclear, and renewable sources stood at 53.7 percent, highlighting a significant shift towards more sustainable and environmentally friendly alternatives. The energy sector remains a pivotal driver of Pakistan's economic and industrial development, influencing productivity, trade competitiveness, and quality of life. During the first nine months of FY2025 (July–March), Pakistan continued to face challenges in energy affordability, sustainability, and security. Nonetheless, key reforms, capacity enhancements, and a shifting energy mix signaled gradual progress toward a more resilient and diversified energy landscape. As of March 2025, total installed electricity generation capacity was 46,605 MW, reflecting a continued shift toward cleaner energy sources. Hydel, nuclear, and renewable sources collectively accounted for 44.3 percent of installed capacity—an improvement from previous years—while thermal power's share declined to 55.7 percent. In terms of electricity generation, Pakistan produced 90,145 GWh during July–March FY2025, with 53.7 percent generated from hydel, nuclear, and renewable sources. This transition reflects a positive move toward indigenous and environmentally friendly energy sources. Sectoral consumption patterns show the household sector remained the largest consumer, accounting for nearly half of the country's electricity usage. PPIB continued to play a critical role in enabling private sector participation in power generation and transmission. During the review period, key milestones were achieved, including the operationalization of the 884 MW Suki Kinari Hydropower Project, along with ongoing progress on new solar, wind, and bagasse-based projects. As of March 2025, PPIB had facilitated 88 operational IPPs with a cumulative capacity of 20,726 MW. The government's focus on renewable and indigenous energy is evident from the project pipeline, 84 percent of which comprises clean energy initiatives. In the petroleum sector, domestic production remained constrained, maintaining a high reliance on imports. However, stable international oil prices helped moderate the energy import bill compared to the previous year. Domestic refining capacity utilization remained suboptimal, though efforts to attract investment in refinery upgrades and new capacity continued. On the natural gas front, the depletion of indigenous reserves remains a major concern. With no major discoveries, Pakistan increasingly relied on LNG imports to meet domestic demand, especially in the power and industrial sectors. In response, initiatives are underway to improve energy efficiency and expand LNG supply chain infrastructure. Coal continues to play a significant role, especially through Thar coal-based power projects. The indigenization of coal energy is being actively pursued, with several Thar-based plants contributing to the national grid. Nonetheless, environmental concerns and the need for clean technology adoption remain key policy considerations.
Business Recorder
a day ago
- Business Recorder
Budget FY26: PSX proposes to resolve provincial jurisdiction differences over collection of sales tax on services at CCI
The Pakistan Stock Exchange (PSX) has urged the federal and provincial governments to raise the issue of jurisdiction differences among provinces over the collection of sales tax on services at the Council of Common Interest (CCI), anticipating the credible body would amicably device 'a (revenue) sharing formula for each province' to settle the grave matter of concern. The bourse said that provincial sales tax is applicable on services including fund and assets management. 'The wordings of the laws enacted by the Sindh Revenue Board, Punjab Revenue Authority and Khyber Pakhtunkhwa Revenue Authority are overlapping as the law governing Sindh Sales Tax enacted by Sindh Revenue Board states that sales tax is to be provided where business is registered while Punjab Sales Tax on Services Act, 2012 and Khyber Pakhtunkhwa Finance Act 2013 states that the province where taxable services are provided or rendered by the service provider is entitled to levy, charge and collect sales tax on such services. 'We (PSX) request that this issue, being of equal relevance to all the provinces and affecting the entire services sector, may be placed on the agenda of the Council of Common Interests so that a sharing formula for each province can be devised to resolve this matter,' the set of budget proposals reads,' the bourse statement said. The three provinces collect sales tax on services at the standard rates in the range of 15-16% of the value of the services rendered. But in the case of the telecommunication services, some provinces charge the tax at the rate of 19.5%. The management of the stock market highlighted the issue in its set of budget proposals for FY26 already sent to the Ministry of Finance, as the dispute over collection of the sales tax on services is 'affecting the entire services sector' including the firms listed at PSX. The stock market facilitated trade in shares of around 550 companies having a total market capitalisation of Rs14.73 trillion (around $52 billion, or 12.7% of Pakistan's gross domestic product (GDP) of FY25), it was learnt. Elimination of minimum tax recommended PSX further requested that 'minimum tax regime should be eliminated from listed companies as such companies are strongly compliant towards specific documentation requirements of various statutes'. It elaborated that the minimum tax on listed companies discourages documentation of the economy. Listed firms already meet extensive regulatory requirements, including audits, tax filings, advance tax payments, and withholding statements, ensuring their accounts align with statutory norms and build trust with authorities. 'However, the levy of minimum tax puts a downward impact on the earnings of listed companies despite having current and brought forward losses.' PSX also proposed enhancing tax credit for listed small and medium enterprises (SME), as they contribute immensely to Pakistan's employment, exports and GDP growth, and provide 80% of all employment in the country. 'In order to encourage small and medium enterprises to get listed on the SME Board, it is proposed that the rate of tax for such listed SME companies be permanently lowered by giving tax credit of 50% of tax payable for 3 to 4 years of listing and then onwards 20% of the tax payable,' it proposed. Besides, it requested to align rates of capital gains tax (CGT) on disposal/sale of securities with rates of CGT on sale of immovable property, align rates of CGT for all derivatives and future contracts traded on PSX with future commodity contracts traded on Pakistan Mercantile Exchange (PMEX), document real estate sector and promote Real Estate Investment Trusts (REITs), and proposed tax relief for foreign investment flows at PSX. To encourage more companies to get listed at PSX, it urged the government to expedite digitisation of the payment system and documentation of the economy through deploying the technology, as 'estimates of the cash-based economy range from 35% to 50% of GDP'.
Express Tribune
3 days ago
- Express Tribune
PSX makes history on macro boost
Listen to article The Pakistan Stock Exchange (PSX) sustained its bullish streak in the outgoing week, with the benchmark KSE-100 index surging to an all-time high of 121,798 points on June 4, before settling at 121,641, marking a weekly gain of 1,950 points (+1.63%). The rally was fueled by renewed investor confidence following successful budget talks with the International Monetary Fund (IMF), the Asian Development Bank's (ADB) approval of a $800 million financing package and the government's finalisation of a Rs1.275 trillion circular debt resolution deal with banks – a significant development for the energy sector. Macroeconomic indicators further supported sentiment as petroleum sales jumped 10% year-on-year (YoY) in May 2025, the Consumer Price Index (CPI)-based inflation eased to 3.5% and the trade deficit narrowed 23% month-on-month (MoM). However, the State Bank's reserves dipped slightly by $7 million, settling at $11.5 billion. On a day-on-day basis, the PSX attempted once again on Monday to decisively breach the key psychological barrier of 120,000 at close but fell short, ending the session at 118,878, reflecting a decline of 813 points. It came due to profit-taking pressure at record levels. On Tuesday, the market soared to an all-time high above 120,000 points as investor optimism grew following the approval of a $800 million loan by the ADB for Pakistan's public finance programme and the government's approval of a Rs880 billion Public Sector Development Programme (PSDP). The benchmark KSE-100 index recorded an increase of 1,573 points and settled at 120,451. The bourse continued its record-breaking run on Wednesday, with the index closing at an all-time high of 121,799, up 1,348 points. Investor sentiment remained upbeat ahead of the federal budget, buoyed by expectations of fiscal relief measures and encouraging macroeconomic indicators. However, the PSX witnessed a volatile session on Thursday, with the benchmark index retreating after hitting record highs a day earlier. Investor sentiment turned cautious due to concerns about stringent conditions linked to a new IMF programme, including the proposed enforcement of agriculture income tax and the IMF's opposition to provincial energy subsidies. The PSX ended the day on a negative note at 121,641, down 158 points. "Building on last week's bullish trend, the market picked up pace, with the KSE-100 reaching an all-time high of 121,798 points on June 4, driven by buying interest across different sectors," Arif Habib Limited (AHL) wrote in its weekly report. Positive sentiment followed Pakistan's successful budget talks with the IMF, alongside the ADB's approval of a $800 million financing package. The government also finalised a Rs1.275 trillion circular debt resolution deal with banks, a significant move for the power sector, AHL said. Meanwhile, during May 2025, petroleum sales rose 10% YoY, inflation came in at 3.5% and the trade deficit narrowed 23% MoM. The State Bank's reserves declined $7 million to $11.5 billion. The market closed at 121,641, depicting a surge of 1,950 points, or 1.63% week-on-week (WoW). Sector-wise, the positive contribution came from commercial banks (1,044 points), power generation and distribution (369 points), fertiliser (206 points), food and personal care products (95 points) and chemicals (60 points). Meanwhile, the sectors that contributed negatively were technology and communication (82 points), automobile assemblers (29 points), miscellaneous (24 points), cable and electrical goods (10 points) and Real Estate Investment Trusts (five points). Scrip-wise, the positive contributors were Pakgen Power (327 points), Bank AL Habib (208 points), NBP (165 points), HBL (160 points) and Fauji Fertiliser Company (158 points). Foreigners' selling was witnessed during the week, which came in at $14.7 million compared to net selling of $5.56 million last week. Average volumes arrived at 660 million shares (-0.2% WoW) while average traded value settled at $98.6 million (up 24.9%), AHL added. Syed Danyal Hussain of JS Global wrote that the KSE-100 index hit an all-time high during the outgoing week, closing at a record level of 121,641 points, up 1.6% WoW. The rally was largely driven by optimism surrounding a potential agreement with the IMF, as indicated by the prime minister, which spurred pre-budget sentiment, he said. The government, following the IMF's endorsement, finalised a Rs1.275 trillion financing agreement with 18 commercial banks to address the power sector's circular debt. On the sectoral front, local cement dispatches rose 9% YoY in May 2025, bringing 11MFY25 volumes to nearly flat levels. Meanwhile, a 26% rise in exports during 11MFY25 lifted total cement sales to a growth of 2%, he added.
