KSE-100 gains over 3% as buying returns to PSX

A day after a historic sell-off, buying returned to the Pakistan Stock Exchange (PSX) as the KSE-100 Index closed with a gain of over 3% on Friday.

The KSE-100 witnessed range-bound trading in the first few hours, hitting an intra-day low of 105,601.04.

However, bulls soon strengthened their grip over the market, which largely continued till end of the session.

At close, the benchmark index settled at 109,513.15, up by 3,238.17 points or 3.05%.

Earlier, buying interest was seen in key sectors including cement, commercial banks fertilizer and oil and gas exploration companies.

Index-heavy stocks including MCB, MEBL, NBP, UBL, OGDC, PPL and HUBCO traded in the green.

“The recent market pullback has opened up valuations, creating attractive entry points for investors looking to capitalize on the dip in equities,” said Intermarket Securities in a note on Friday.

Similar sentiments were expressed by Arif Habib Limited (AHL), which attributed the earlier decline to “profit-taking combined with redemptions in mutual funds”.

“The KSE-100 2025 forward P/E [price to earning] ratio of 5.7x is still substantially below the 10-year average P/E of 8.2x,” AHL said in a report.

“This discount signals a sharp undervaluation of the index, suggesting that the market has 44% room for appreciation to 153k points when it aligns closer to historical valuation multiples.”

On Thursday, massive selling was observed at the 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.

During the last three sessions, the KSE-100 index has declined by 9,894 points (8.5%) from its peak of 116,169 recorded on December 16, 2024.

Investors attributed the steep decline to news of the government considering a tax amendment bill that proposes increased restrictions on non-filers in areas such as real estate, equity, and auto purchases.

Globally, Asian shares were pinned near three-month lows on Friday as investors awaited key US inflation data that could either ease or worsen concerns about price pressures, while the dollar towered at two-year peaks.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan, fell 0.4% on Friday and was headed for a weekly drop of 2.6%. It is, however, up over 8% for the year.

The closely watched inflation gauge - the US Core Personal Consumption Expenditures - is due later in the day.

Forecasts are centred on a monthly rise of 0.2% for November, and any upward surprises there could lead markets to further scale back bets for US policy easing next year.

Futures imply just 37 basis points of rate cuts from the Federal Reserve in 2025, less than two cuts, after the US central bank turned hawkish at its last meeting of the year.

A rate cut is not fully priced in until June.

Meanwhile, the Pakistani rupee reported a slight decline against the US dollar, depreciating 0.03% in the inter-bank market on Friday. At close, the currency settled at 278.42 for a loss of Re0.07 against the greenback.

Volume on the all-share index decreased to 754.92 million from 1,167.36 million on Thursday.

However, the value of shares declined to Rs39.42 billion from Rs56.80 billion in the previous session.

WorldCall Telecom was the volume leader with 99.94 million shares, followed by Pace (Pak) Ltd with 43.28 million shares, and K-Electric Ltd with 40.64 million shares.

Shares of 459 companies were traded on Friday, of which 281 registered an increase, 119 recorded a fall, while 59 remained unchanged.