Bloodbath at PSX: KSE-100 plunges record 4,795 points amid correction

It was yet another day of massive selling at the Pakistan Stock Exchange (PSX), as equities entered a correction phase, with the benchmark KSE-100 Index closing around 106,200 after a historic single-day loss of 4,795 points on Thursday.

The loss comes a day after stocks suffered the then-worst-ever single-day decline of 3,790 points.

In the last three sessions alone, the stock market has lost nearly 10,000 points from its historic high of 116,169.41 reached on December 16, 2024.

Meanwhile, selling pressure persisted throughout the trading session, dragging the benchmark index to an intra-day low of 105,937.37.

At close, the KSE-100 settled at 106,274.98 level, a decrease of 4,795.32 points or 4.32%.

Sectors 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 came 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 on the day.

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

“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.

Saad Hanif, Head of Research at Ismail Iqbal Securities, told Business Recorder that the correction was overdue “as the stock market had witnessed a non-stop rally.”

“It is a good opportunity for buying as scrips have once again become attractive,” he added.

Topline Securities said the sharp sell-off was “triggered by significant redemptions from local mutual funds, compounded by year-end profit-taking by institutions, collectively dragging the market into turmoil”.

“MARI extended its losing streak, locking at the lower circuit for the third consecutive session. Persistent concerns over its overvaluation, particularly concerning near-term fundamentals, fuelled the relentless sell-off,” it added.

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%.

Meanwhile, the Pakistani rupee registerd a slight decline against the US dollar, depreciating 0.04% in the inter-bank market on Thursday. At close, the currency settled at 278.35 for a loss of Re0.12 against the greenback.

Volume on the all-share index increased to 1,167.36 million from 1,111.92 million on Wednesday.

However, the value of shares declined to Rs56.80 billion from Rs60.25 billion in the previous session.

WorldCall Telecom was the volume leader with 177.64 million shares, followed by K-Electric Ltd with 81.90 million shares, and Cnergyico PK with 68.24 million shares.

Shares of 472 companies were traded on Thursday, of which 66 registered an increase, 371 recorded a fall, while 35 remained unchanged.