PTBP Web Desk
The Pakistan Stock Exchange (PSX) faced relentless selling pressure on Wednesday, with the benchmark KSE-100 Index losing nearly 3,900 points during intra-day trading. The index briefly crossed the 116,000 mark before declining sharply to close at 110,988.45, a loss of 3,872.23 points or 3.37%.
Trading commenced on a positive note as the KSE-100 Index surged to an intra-day high of 116,236.70, reflecting optimism in the market. However, widespread selling across major sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration companies, oil marketing companies (OMCs), power generation, and refineries, reversed the gains.
Notable stocks such as HUBCO, PRL, NRL, MARI, OGDC, PPL, ENGRO, HBL, MCB, MEBL, and UBL traded in the red, pulling the index downward.
Market experts attribute the dramatic fall to profit-taking, a common practice after a period of sustained gains. Earlier, buying momentum had been driven by improved economic indicators and a reduction in the policy rate, which shifted liquidity towards equities. However, as investors sought to secure profits, selling pressure mounted, leading to a sharp decline in the index.
The market downturn, a key positive development emerged on the economic front. Pakistan’s current account posted a surplus of $729 million in November 2024, according to data released by the State Bank of Pakistan (SBP). This marks a significant turnaround from the $148 million deficit recorded in the same month of the previous year.
This is the fourth consecutive month of a current account surplus, reflecting improved economic fundamentals and stronger external accounts.
The market’s struggles began on Tuesday when the KSE-100 Index witnessed a volatile session, shedding over 1,300 points to settle at 114,860.68. This volatility set the stage for Wednesday’s dramatic losses as profit-taking and external factors weighed on investor sentiment.
Globally, equity markets also exhibited mixed performance, contributing to the cautious sentiment at the PSX. Major indices such as the S&P 500 and FTSE futures showed minimal movements as investors adjusted their portfolios ahead of key central bank meetings.
In Asia, the MSCI Asia-Pacific Index inched up by 0.2%, while US benchmark 10-year yields touched one-month highs of 4.4% before settling at 4.39%.
Meanwhile, global automotive stocks saw a slight boost following reports of a potential tie-up between Nissan and Honda, which provided some positive news amid the broader market uncertainty.
The significant drop in the KSE-100 Index highlights the need for caution as investors navigate a volatile market environment. While profit-taking has been a key factor, external influences such as global market trends and central bank policy decisions are likely to play a crucial role in shaping market direction in the coming days.
For Pakistan, the current account surplus is a silver lining, suggesting that the country is making progress in addressing external economic challenges. However, sustained improvements in investor confidence will depend on domestic policy measures and global economic conditions.
