PTBP Web Desk
The Pakistan Stock Exchange (PSX) experienced a turbulent trading session on Tuesday, following a historic surge just a day prior. The KSE-100 Index, the benchmark for market performance, witnessed a dramatic swing, starting on a positive note but losing over 850 points during intra-day trading due to profit-taking by investors.
The trading day began with optimism, as the KSE-100 Index reached an intra-day high of 115,036.49 points. However, this positivity was short-lived as investors began cashing in on profits, dragging the index to an intra-day low of 112,836.29. By 2:25 PM, the benchmark index was hovering at 113,065.26 points, reflecting a decline of 859.15 points or 0.75%.
The session displayed a mixed trend, with notable selling pressure in sectors such as automobiles, cement, chemicals, commercial banks, power generation, and refineries. Key index-heavy stocks, including HUBCO, HBL, MCB, and NBP, traded in the red, further pulling down the market. Conversely, stocks like PPL, OGDC, SNGP, PSO, and SHEL managed to stay in the green, providing some relief to the market.
Market analysts attribute the downturn to profit-taking after Monday’s unprecedented surge. Intermarket Securities, in a note, expressed cautious optimism, stating, “The easing of political tensions, with ongoing dialogue between the government and opposition, is expected to create a conducive environment for the rally to sustain.”
Monday’s trading session had marked a historic moment for the PSX, with the KSE-100 Index posting its second-largest single-day increase of over 4,400 points, closing at 113,924.41. This rally was fueled by investor confidence amid signs of political stability and encouraging economic indicators.
Globally, Asian stock markets edged up on Tuesday, although trading remained subdued due to the holiday-curtailed week. The U.S. dollar maintained its strength, hovering near a two-year high. Elevated U.S. Treasury yields, driven by expectations of fewer Federal Reserve rate cuts in 2025, supported the greenback’s position.
Central bank updates from Japan and Australia provided further insights into their monetary policies. Japan’s October meeting minutes and Australia’s December minutes indicated their rationale for holding interest rates steady, adding nuance to the global economic outlook.
The robust dollar, however, posed challenges for commodities and gold, while also pressuring emerging market economies like Brazil and Indonesia. These nations have been compelled to intervene in currency markets to curb the depreciation of their currencies, aiming to prevent domestic inflationary pressures.
The volatile session underscores the fragility of investor sentiment amid fluctuating economic and political conditions. While Monday’s rally reflected a wave of optimism, Tuesday’s profit-taking highlights a cautious approach among investors, particularly as uncertainties linger.
Despite the profit-taking, market experts believe that continued progress in government-opposition dialogue could bolster investor confidence in the coming weeks. This optimism is contingent on the successful implementation of economic reforms and sustained political stability.
The PSX’s performance this week will likely hinge on domestic political developments and global economic trends. The easing of political tensions and clarity on economic policies could pave the way for a sustained rally. However, external factors, such as the U.S. dollar’s strength and global market trends, will continue to influence investor behavior.
As the market navigates these challenges, stakeholders are advised to adopt a balanced approach, focusing on long-term opportunities while mitigating risks in the short term.
