KARACHI:– The Pakistan Stock Exchange (PSX) on Thursday after a brief open in the negative recovered slowly, and the benchmark KSE-100 Share Index reached 43,126.85 points after gaining 133.82 or 0.31% at 11.39am. Selling pressure gained pace just before midday and profit-booking is likely to persist throughout the day.
Earlier, the Index declined by 49.80 points or 0.12%, and hit 42,943.23 points at 10.54am amid lack of positive triggers and prevailing negative sentiments among investors due to rising political noise between the political parties. The market opened at 43,015.81 points today after shedding 214 points yesterday.
The emerging disapproval from Pakistan Tehreek-e-Insaf (PTI) allies over its policies contributed to the decline as the disagreements between the PTI government and its allies are being taken as a “sign of a brewing political crisis.”
The overall trading volumes fell to 171.3 million shares yesterday compared with Tuesday’s tally of 249.7 million. The value of shares traded yesterday was Rs6.1 billion. At the end of the day, 120 stocks closed higher, 224 declined and 20 remained unchanged.
Foreign institutional investors were net buyers of Rs343 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
Yesterday, a total of 119,954,170 shares were traded compared to the trade of 151,124,910 shares during the previous day, whereas the value of shares traded during the day stood at Rs5.164 billion as compared to Rs6.48 billion on Tuesday.
On Tuesday, traders opined that after a major run-up since August last year, the index was consolidating at the current levels before moving forward. “Early trade has been witnessing much of the volatility and the index has been fluctuating from negatives to positives and vice-versa.”
“Investors often have been disinterested in much of the latter day trading when speculators are busy churning mainly low-priced stocks.”
A total of 151,124,910 shares were traded Tuesday compared to the trade 199,044,740 shares during Monday, whereas the value of shares traded during the day stood at Rs6.48 billion as compared to Monday’s Rs9.15 billion.
The previous week witnessed massive overall spike in the stocks as local and foreign investors rampaged across the market to quickly hit upper circuits after the war clouds hanging over the region due to US-Iran hostilities dissipated which provided the investors the much-needed comfort to move funds from gold and money market back to risky assets that may provide higher returns.
There was no major negative news flow that could thwart the market exuberance. On the political front, the belligerent atmosphere in the country took a pause after some reconciliation between the government and the opposition following the consensus passage of Army, Air Force and Navy Amendment Bills.
Earlier, investors’ optimism continued as they saw the market back in the green after two earlier dismal years of negative returns. From Aug 16, 2019 when the benchmark index had hit the pit at 28,765 points, the market has witnessed a spectacular rally that has carried it up by more than 50pc in fewer than five months.
Improvement on the external front together with stability in the Pakistani Rupee was expected to reassure foreign investors. Meanwhile, inflationary readings are set to touch peak in January 2020 (this month) with an imminent interest rate cut to follow, domestic investors remain jubilant as well, he said.