Stocks on Wednesday went on a curler coaster journey, reversing a multi-session rally as risk-averse buyers resorted to profit-taking in an overbought market amid heightened political uncertainty.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Shares Index retreated to 95,546.45 factors, down 310.21 factors or 0.32%, from the earlier shut of 95,856.66, after hitting a day excessive of 96,711.33 factors.
While the rally displays broad-based optimism, market correction emerged noon.
Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, attributed the bearish development to the prevailing political and financial instability, stating: “Stocks bearish on political uncertainty and safety unrest within the nation. Rupee instability, overseas outflows, and pending IMF board resolution over authorities’s alternate levies to minibudget triggered the bearish exercise.”
The market sentiment could have been dampened by heightened political noise, together with the deliberate protest on November 24 by an opposition get together, and escalated safety issues resulting from militancy.
Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company (Private) Limited, commented, “The market is taking correction immediately because it has gained considerably throughout the yr.”
Sectors, together with cement, banking, fertiliser, oil and gasoline exploration, oil advertising and marketing, and energy era remained within the limelight.
Notable good points have been posted by index-heavy names similar to Ok-Electric, Pakistan State Oil, Shell, Oil and Gas Development Company, Pakistan Petroleum, Mari Petroleum, Meezan Bank, National Bank of Pakistan, and Habib Bank.
Factors supporting the rally are falling inflation, a 32% year-on-year surge in Foreign Direct Investment (FDI) to $904 million throughout July-October, and a present account surplus of $349 million for October 2024.
The State Bank of Pakistan (SBP) reported that October marked the third consecutive month-to-month present account surplus, pushed by a 7% month-on-month and 24% year-on-year rise in remittances.
Foreign trade reserves have additionally reached a two-year excessive, with projections exceeding $11 billion within the coming weeks.
Inflation traits additional bolstered investor sentiment. November’s Consumer Price Index (CPI) is projected to fall between 4.5% and 5%, marking a historic decline—the primary time in 78 months inflation is anticipated to drop beneath 5%. For FY25, inflation is anticipated to common round 7.5%.
The know-how sector led the rally, supported by a major rise in export remittances from the Information and Communication Technology (ICT) sector. Remittances surged 34.9% year-on-year to $1.206 billion throughout July-October 2024, with October alone witnessing a 38.6% enhance to $330 million.
This follows Tuesday’s outstanding session, the place the KSE-100 Index touched an intraday peak of 96,036 factors earlier than closing at 95,857, marking a acquire of 860.99 factors or 0.91%.
