A volatile session was witnessed at the Pakistan Stock Exchange (PSX), with the benchmark KSE-100 losing over 450 points as investors resorted to profit-taking during trading on Tuesday.
The market kicked off trading on a positive note, pushing the benchmark index to an intra-day high of 116,424.85.
However, selling pressure was observed in the later part of the trading session erasing all gains.
At 2pm, the KSE-100 Index was hovering at 115,392.31, a decrease of 452.5 points or 0.39%.
“We think that the market will continue to gain momentum hereon and would be up trending,” said Intermarket Securities in a note. “However, it would be led by flows mostly. Hence we don’t see a big rally given the lack of triggers,” it added.
The brokerage house was of the view that the upcoming Monetary Policy Committee (MPC) meeting on January 27 could be a positive trigger if the central bank delivers a larger than 100 basis points rate cut.
On Monday, PSX also closed on a positive note on the back of fresh buying, mainly by local investors coupled with institutional support. The benchmark KSE-100 Index increased by 572.73 points or 0.5% and closed at 115,844.82 points.
Internationally, global shares and US Treasuries were volatile on Tuesday, reversing a brief relief rally from early in the session in the first few hours of Donald Trump’s new presidency after he announced plans for trade tariffs on neighbouring countries.
US markets were closed for a holiday on Monday, so the first responses to Trump’s inauguration were felt during Asian trade on Tuesday.
Trump said that his administration is mulling imposing 25% tariffs on Mexico and Canada as soon as Feb. 1 - a move which doused investors’ hopes of a delay after they had been cheering the brief mention of tariffs in his inauguration speech.
Trump’s plans for hefty import tariffs and tax cuts are a key area of focus for financial markets on the view that such policies will stoke inflation and run the US economy red hot again, which would boost the dollar and hurt bonds.
US stock futures swiftly reacted to the latest developments by reversing their gains from earlier in the session, with Nasdaq futures sliding 0.4% while S&P 500 futures fell 0.25%.
MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 0.2%.
This is an intra-day update
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