Pakistan stocks drop steeply as political uncertainty peaks

• Market closes at 47,429.82 after losing 956.43 points. 
• Shares of 343 companies traded during session. 
• “Correction, after market hit 49,000, is here but will soon subside.” 

KARACHI: The Pakistan Stock Exchange (PSX) on Tuesday witnessed a steep decline after the benchmark KSE-100 fell by nearly 1,000 points as it went through a correction since jumping past the 49,000 mark. 

The market closed the day on a negative note as it shed 956.43 points or 1.98% to settle at 47,429.82 points. 

According to a report by Arif Habib Limited, the 48,000 mark proved to be pivotal and trade below saw downside momentum accelerate. “The correction that we had been anticipating since the market hit 49,000 is here but will soon subside,” it added. 

However, there are several factors that weighed on the market sentiments including political uncertainty and the ambiguity surrounding the upcoming elections and caretaker set-up. 

Pakistan-Kuwait Investment Company’s Head of Research Samiullah Tariq said that the stocks plunged as political jitters sparked a massive profit-taking spree with investors shedding risky assets in an overbought market amid economic headwinds that are far from losing strength — much less changing course in the near to medium term.

Head of Equities at Intermarket Securities Raza Jafri told Geo.tv that selling was witnessed in profit-taking in state-owned oil explorers which have yet to see an improvement in circular debt. 

“In addition, it is possible that some redemptions may have come through given the KSE-100’s sharp Fiscal Year To Date (FYTD) rise in the backdrop of sustained high inflation. On the whole, it is not surprising to see episodic profit taking came through. Across FY24 however, Pakistan remains an excellent macro trade, with valuations likely to rerate when the interest rate cycle turns,” he added. 

Shares of 343 companies were traded during the session. At the close of trading, 49 scrips closed in the green, 278 in the red, and 16 remained unchanged.

Cynergico PK Limited was the volume leader with 28.31 million shares traded, losing Rs0.33 to close at Rs3.47. It was followed by Oil & Gas Development Company Limited with 27.78 million shares traded, losing Rs7.72 to close at Rs97.85, and K-Electric Limited with 24.68 million shares gaining Rs0.13 to close at Rs2.10.