PTBP Web Desk
The Stock Exchange (PSX) faced yet another day of significant turmoil on Thursday, with the benchmark KSE-100 Index recording its largest single-day loss in history. The index plummeted by 4,795 points, closing at 106,274.97, marking a steep 4.32% decline. This drop follows the previous day’s sharp fall of 3,790 points, reflecting a deep correction phase in the market.
In just three consecutive trading sessions, the KSE-100 Index has lost nearly 10,000 points from its record high of 116,169.41, reached on December 16, 2024. The persistent selling pressure has dragged the index to an intra-day low of 106,075.53, sparking concerns among investors and analysts alike.
Sectors such as chemicals, commercial banking, power generation, and refineries bore the brunt of the sell-off. Prominent index-heavy stocks, including MARI Petroleum, Hub Power Company (HUBCO), National Refinery Limited (NRL), Habib Bank Limited (HBL), National Bank of Pakistan (NBP), MCB Bank, and United Bank Limited (UBL), traded deep in the red, exacerbating the overall market sentiment.
The sharp decline in the PSX has been attributed to widespread profit-taking by investors. “The correction was overdue as the stock market had witnessed a non-stop rally,” said Saad Hanif, Head of Research at Ismail Iqbal Securities. He added that the current downturn presents an attractive buying opportunity as many scrips have become undervalued.
A similar view was shared by Intermarket Securities Limited, which, in a note to investors, mentioned that the ongoing negative trend might persist. However, the firm highlighted that the correction creates a favorable buying opportunity for those who missed out on the recent rally. Despite the recent slump, key market drivers such as liquidity, falling interest rates, and low political noise remain supportive of recovery.
Adding to the market’s woes, the government introduced the “Tax Laws (Amendment) Bill, 2024” in the National Assembly on Wednesday. This legislation aims to tighten restrictions on non-filers while generating financial resources for economic development. Under the proposed bill, non-filers would face prohibitions on purchasing vehicles over 800cc, acquiring property beyond a specified limit, and making stock purchases exceeding a certain threshold. The announcement has caused unease among market participants, further contributing to the selling pressure.
Globally, financial markets also faced headwinds. Asian stocks slid, bond yields surged, and the US dollar reached a near two-year high on Thursday. These developments came after the US Federal Reserve signaled a cautious approach to rate cuts for the coming year, resulting in a sharp drop in US equities. The Dow Jones Industrial Average plunged over 1,000 points, with Treasury yields climbing and traders adjusting their expectations for future rate cuts.
Asian markets mirrored the negative sentiment from Wall Street. MSCI’s broadest index of Asia-Pacific shares outside Japan fell by 1%, Japan’s Nikkei dropped by 1.8%, and Australian shares slid by more than 2%.
Despite the ongoing market turmoil, analysts believe that the PSX’s current correction phase could pave the way for future growth. The recent decline, while unsettling, has made many stocks more attractive for long-term investors. “It’s a good opportunity for those who missed the rally,” Hanif reiterated.
The PSX’s decline highlights the importance of staying vigilant in volatile markets and capitalizing on opportunities that arise during downturns. Investors are advised to closely monitor macroeconomic developments and sector-specific trends to make informed decisions.
