Bears Take Over PSX as Market Dips
Shares at the Pakistan Stock Exchange (PSX) took a hit on Friday, with the market experiencing a drop of 1,200 points during intraday trading. However, the market recovered by the end of the session, showing a slight improvement.
Intraday Drop and Recovery
The benchmark KSE-100 index faced a decline of 1,216.86 points, or 1.07%, reaching 112,963.64 points at 12:17 pm from the previous close of 114,180.50 points. By the end of the trading session, the index closed at 114,301.80 points, showing a marginal gain of 121.3 points or 0.11%.
Market Pressure from Commercial Bank Shares
According to Awais Ashraf, director of research at AKD Securities, the KSE-100 index faced pressure due to the decline in commercial bank share prices. This drop is attributed to concerns about potential tax increases, either through adjustments to the advance-to-deposit ratio (ADR) definition or a rise in corporate tax rates. Despite this, sectors such as Fertiliser and Exploration & Production (E&P) continued to perform well, contributing over 500 points to the index.
Correction After a Big Rally
Yousuf M. Farooq, director of research at Chase Securities, commented that the market was “taking a breather” after a substantial rally. He emphasized that corrections are a normal part of the market cycle and advised retail investors to focus on long-term trends rather than short-term fluctuations.
PSX’s Strong Performance Over the Past Year
Just a day before, the PSX continued its record-breaking performance, with the KSE-100 index climbing by over 3,000 points to surpass the 114,000 mark, marking its third-highest gain ever. Over the last 18 months, the benchmark index has surged from around the 40,000 mark to over 112,000, with a 180% return.
Conclusion
Despite the volatility witnessed on Friday, the PSX has shown resilience and strong growth in recent months, with certain sectors providing much-needed support during market corrections.
