Selling continues at PSX, KSE-100 falls to 108,000 amid correction

Selling pressure persisted at the Pakistan Stock Exchange (PSX) on Thursday, a day after stocks suffered the worst-ever single-day decline in terms of points as the benchmark KSE-100 Index fell over 3,000 points during intra-day trading.

At 2:10pm, the benchmark index was hovering at 108,022.13, a decrease of 3,048.16 points or 2.74%.

Key stocks including chemical, commercial banks, power generation and refineries experienced selling pressure. Index-heavy stocks including MARI, HUBCO, NRL, HBL, NBP, MCB and UBL traded in the red.

The development comes after the PSX witnessed massive selling on Wednesday as well. Investors resorted to profit-taking with the benchmark KSE-100 Index closing at just over 111,000 after a historic single-day loss of 3,790 points.

“It is possible that the negative trend continues today,” said Intermarket Securities Limited in a note.

“Having said that, further downside creates buying opportunity, especially for those investors who missed the recent leg of the rally since late November. Most driving factors for the market - liquidity, falling interest rates and low political noise - remain intact.”

The market opened negative on Thursday before recovering. However, the upside was short-lived as investors resorted to profit-taking soon after, throwing the index deep into the red again.

In a key development, the government on Wednesday introduced a money bill, “Tax Laws (Amendment) Bill, 2024,” in the National Assembly to further tighten the grip on non-filers and to generate financial resources for economic development.

Under the said bill, non-filers will be prohibited from purchasing, booking, registration of vehicles over 800cc, acquiring property beyond a specified limit, and making stock purchases beyond a certain threshold.

Globally, Asian stocks slid, bond yields rose and the dollar was perched near a two-year high on Thursday after the US Federal Reserve cautioned it would ease the pace of rate cuts in the coming year and investors braced for a Bank of Japan policy decision.

The Fed cut interest rates on Wednesday as expected, but Chair Jerome Powell’s explicit references to the need for caution from here on sent US stocks sharply lower, with Treasury yields surging and traders scaling back bets on rate cuts next year.

The Dow Jones Industrial Average, plunged more than 1,000 points.

Asian stocks have taken the cue from Wall Street, with MSCI’s broadest index of Asia-Pacific shares outside Japan down 1%. Japan’s Nikkei, fell 1.8%, while Australian shares, tab slid more than 2%.

This is an intra-day update