KARACHI: Amid upcoming tough talks with the International Monetary Fund (IMF) and uncertainty about the interest rate outlook following mounting inflationary pressures, the stock market experienced an across-the-board selling spree as a result the benchmark KSE 100-share index fell below the 65,000 level on Tuesday.

An IMF mission will arrive on Wednesday and hold economic review talks under the $3bn Stand-By Arrangement from March 14 to 18. The government would also engage the visiting mission to start negotiations for a new larger and longer-term Extended Fund Facility.

Investors were concerned about the IMF’s demand for raising the general sales tax rate to 18pc for several essential items such as unprocessed food, stationery, medicines and POL products. It has already proposed liberalisation of imports and doubling the taxes for both salaried and non-salaried individuals.

Ahsan Mehanti of Arif Habib Corporation said concerns over the surge in industrial gas tariff and uncertainty over the outcome of talks with the IMF for a fresh bailout package kept investors unsettled who resorted to profit-taking on the first session of Ramazan.

He added that a weak ru­­pee and uncertainty about an expected cut in the interest rate in the upcoming monetary policy review on March 18 also contributed to a bearish close.

Topline Securities Ltd said the equities began trading on a positive note as the index made an intraday gain of 104 points to 65,860, but it lost the early gains as investors resorted to profit-taking at the day’s high.

Fertiliser, exploration & production, power and fertiliser sectors contributed negatively to the index, as Dawood Hercules, Oil and Gas Development Compa­­ny, Pakistan Petroleum Ltd, Hub Power and Engro Corporation cumulatively wiped out 341 points from the index.

As a result, the KSE-100 index closed at 64,801.70 points after plunging by 953.60 points or 1.45 per cent from the preceding session.

The overall trading volume tumbled 41.37pc to 321.70 million shares. The traded value also dipped 34.61pc to Rs10.85bn on a day-on-day basis.

Stocks contributing significantly to the traded volume included Hascol Pet­roleum Ltd (29.32m sha­res), Pakistan Inter­nati­o­nal Airlines Corp (28.89m shares), Cnergyico PK Ltd (25.50m shares), Kohinoor Spinning Mills Ltd (23.96m shares) and Air Link Com­munication Ltd (18.28m shares).

Companies registering the biggest decreases in their share prices in absolute terms were Nestle Pakistan (Rs97.77), Sazgar Engineering Works Ltd (Rs31.71), Lucky Core Industries Ltd (Rs27.93), Attock Refinery Ltd (Rs24.33) and National Refinery Ltd (Rs22.97).

Shares registering the biggest increases in their share prices in absolute terms were Shahmurad Sugar Mills Ltd (Rs17.28), Pakistan Services Ltd (Rs12.35), Services Indus­tries Ltd (Rs5.00), Bela Automotives Ltd (Rs4.21) and GOC Pak Ltd (Rs3.83).

Foreign investors rema­i­ned net buyers as they pic­ked shares worth $0.35m.

Published in Dawn, March 13th, 2024