PSX tumbles; down by nearly 4,000 points

KARACHI: The Pakistan Stock Exchange (PSX) witnessed a volatile session on Tuesday and closed with over 1,300 points loss. The trading session experienced notable fluctuations with the highest of the day clocking in at 117,039 points, before the decline to 114,860.68 points at closing time.

On Wednesday (today), the index deepened the losses, and by 3 PM it had tumbled down by nearly 3,200 points to hover around 111,664.91 points. In early hours of trading today, the benchmark KSE-100 index had shown a trend of recovery. Right after opening, the index jumped over 500 points, and then continued the growth to touch the morning’s highest at 116,236.70 points. Some of these gains were lost as the trading day progressed, but the index remained in green.

However, the selling pressures and profit-taking kicked in once again and the stock market turned red. Some companies in the banking and energy sectors managed to remain in the green by 3 PM, but the majority of the stocks underwent correction for the purchases made before SBP’s policy rate cut. The decline continues to deepen with the KSE-100 recording 3,964.41 points decline to trade at 110,896.27 points around 3:20 PM.

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On Monday, the trading began with expectations of the decline in policy rate by the State Bank of Pakistan (SBP) and the bourse spent Tuesday adjusting to the new interest rates. The KSE-100 index has been on a bullish streak for the past several sessions with periodic correction. Despite the periodic corrections, the market analysts are expecting the stock market to continue the positive trend and build more resilience towards external shocks, including political instability.

By the end of the upcoming calendar year, analysts expect the index to reach around 120,000 points to 127,000 points. With the overall improvement in the macroeconomic indicators, lower inflation, and strengthening foreign exchange reserves, the investor confidence is likely to remain high in the country’s capital market.

By 3:20 PM, the index had undergone severe decline, looking like this: