KARACHI: Shares at the Pakistan Stock Exchange (PSX) experienced a significant decline on Tuesday, with the benchmark KSE-100 index dropping 956 points or 1.98%, closing at 47,429.82 points. At one point during the day, it even reached an intraday low of a 1,041-point decline around 3:29 pm.
Siddique Dalal, the CEO of Dalal Securities, attributed this decline to a notable surge of almost 8,000 points from the 40,000-mark, which had inevitable repercussions. Some firms engaged in profit-taking activities, and there was uncertainty surrounding the upcoming elections. Reports of potential election process delays added to the confusion.
Dalal believed that the market might need a day or two to resume its upward trend, depending on whether an interim setup would be established or elections would be conducted within the next three months.
Raza Jafri, the Head of Research at Intermarket Securities, explained that the decline was a result of profit-taking after a significant rally in the Fiscal Year To Date (FYTD). The selling pressure primarily targeted energy stocks, which had risen due to expected resolution of circular debt issues, but that resolution hadn’t materialized yet.
Jafri emphasized that Pakistan’s macroeconomic landscape remained strong, and with expectations of interest rate reductions, there was potential for re-evaluation of valuations. He also saw the ongoing market correction as an opportunity to accumulate holdings during market dips strategically.
Ahsan Mehanti, the CEO of Arif Habib Commodities, stated that investor apprehensions regarding political turbulence, uncertainty about the caretaker administration’s appointment, and the depreciation of the national currency contributed to the stock market’s decline. Additionally, discouraging figures related to oil sales, exports, and fertilizer production in July 2023, along with a downturn in global crude oil prices, collectively influenced the market’s bearish performance.
