The capital market witnessed a turbulent session on Friday, marked by fluctuations as investor warning dominated buying and selling exercise.
Lingering issues over international financial developments, persistent year-end profit-taking, and uncertainty surrounding current coverage measures overshadowed improved macroeconomic indicators that proceed to strengthen long-term market confidence.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index started the day on a constructive observe, climbing 1,232.73 factors, or 1.16%, to hit an intraday excessive of 107,507.69. However, heightened profit-taking stress and cautious sentiment reversed early positive factors, dragging the index to an intraday low of 105,772.84.
Market contributors remained cautious of world financial uncertainties and the potential impression of current fiscal and financial coverage changes. Concerns over overseas outflows and rupee stability continued to weigh on sentiment, whereas year-end portfolio changes contributed to profit-taking in key sectors, notably in blue-chip shares that had rallied in current classes.
The session adopted the discharge of the 2024 Global Consumer Confidence Index (CCI), which revealed shopper sentiment at its strongest degree in three years. The index rose by +0.8 factors, reflecting rising public optimism amid bettering macroeconomic indicators.
The report confirmed a big shift in financial perceptions, with the share of people describing the economic system as “sturdy” climbing from 4% in the beginning of the 12 months to 16% in December. Inflation issues fell to their lowest degree in three years, whereas confidence in job safety, financial savings, and buying energy continued to develop.
The report additionally highlighted a fourfold enhance within the ease of creating main purchases, equivalent to houses and autos, indicating larger monetary optimism amongst customers.
Investor issues had been heightened by current knowledge from the State Bank of Pakistan (SBP), which revealed a 112% year-on-year surge in revenue and dividend repatriations by multinational corporations, reaching $1.128 billion within the first 5 months of FY2025.
November alone accounted for $321.6 million, a 586% year-on-year enhance, though this marked a 22.3% month-on-month decline as a result of clearing of pending funds and eased restrictions on greenback outflows.
Adding to market stress, the federal government launched The Tax Laws (Amendment) Bill, 2024, proposing stringent measures towards non-filers. The laws consists of barring non-filers from buying autos above 800cc, actual property, and shares past particular limits, whereas additionally proscribing their means to open financial institution accounts or execute massive monetary transactions.
The Federal Board of Revenue (FBR) has been granted powers to freeze accounts and properties for non-compliance. These measures have raised issues over lowered liquidity and spending, contributing to investor warning.
Despite the current market fluctuations, Pakistan’s macroeconomic fundamentals proceed to strengthen. The nation recorded a $729 million present account surplus in November, the biggest since February 2015. For the primary 5 months of FY2025, the excess stood at $944 million, in comparison with a $1.67 billion deficit in the identical interval final 12 months.
This enchancment was pushed by a discount within the commerce and companies deficits and decrease curiosity and dividend repatriations.
Foreign direct funding (FDI) additionally rose 31% year-on-year to $1.124 billion, with vital inflows from China, Hong Kong, and the United Kingdom. Meanwhile, remittances grew by 29% year-on-year in November to $2.9 billion, bringing the five-month whole to $14.8 billion.
The SBP’s 200 foundation level price lower, which lowered the coverage price to 13%, displays efforts to stimulate financial progress amidst easing inflation, which fell to 4.9%, its lowest degree since April 2018.
Friday’s volatility adopted Thursday’s historic sell-off, throughout which the KSE-100 Index plummeted 4,795.32 factors (-4.32%) to shut at 106,274.97, marking the steepest single-day decline in PSX historical past.
The sell-off was pushed by year-end redemptions from native mutual funds and institutional profit-taking, with heavyweight shares equivalent to MARI (-10%), HUBC, UBL, OGDC, and ENGRO collectively contributing over 1,500 factors to the decline, in line with Topline Securities.
Despite the damaging sentiment, buying and selling volumes remained sturdy, with 1,155 million shares traded and a turnover of Rs 56.6 billion.
