Market bloodbath: KSE-100 sees massive selling, plummets over 4%

Heavy selling was seen at the Pakistan Stock Exchange (PSX) as the benchmark KSE-100 Index declined by 2,534 points, a fall of over 4% on a day-to-day basis, on Tuesday.

At close, the benchmark KSE-100 settled at 59,171 level, a decrease of 4.11%. This is the highest day-to-day fall in terms of points in KSE-100 history.

The benchmark index has also declined by 11% from its peak of 66,427 achieved on December 12, just two weeks ago, conveying the volatility seen at the PSX in recent weeks.

On Tuesday, across-the-board selling was witnessed as index-heavy sectors including automobile assemblers, cement, chemical, commercial banks, oil and gas marketing companies, oil and gas exploration companies, refineries and pharmaceutical traded in the red.

Additionally, unconfirmed reports that the International Monetary Fund (IMF) has ruled out ‘non-cash adjustments’ as a way of clearing circular debt stock irked sentiment.

Business Recorder could not verify the reports.

CEO of brokerage house Topline Securities, Mohammed Sohail, said the KSE-100 Index is seeing a fast, but much-needed correction after a non-stop rally. His comment came during the early part of the trading session when the KSE-100 was down around 1,200-1,400 points.

“High leveraged position with year end affecting market trends,” he added in a post on X, formerly Twitter.

At close on Friday, volatility had also persisted at the bourse amid some rise in political uncertainty as the benchmark KSE-100 Index lost nearly 1,000 points to settle at 61,705.09

Experts say the recent selling pressure comes on account of correction after the Pakistani market showed impressive growth in recent weeks, pushing the index to record high levels of over 66,000.

In a key development, the Sindh High Court (SHC) also suspended the SRO 1588(I)/2023 of the Federal Board of Revenue (FBR) which has imposed a 40% additional tax on windfall income of banks.

Despite the recent losses, Pakistan equities have performed well and provided hefty gains, outperforming other major asset classes during calendar year 2023.

Investment in US dollar, Naya Pakistan US$ Certificate under Roshan Digital Account (RDA), gold, and T-bills also remained attractive investment avenues for local investors, experts said.

Globally, Asian stocks traded tentatively on Tuesday as investors were still digesting data released on Friday that showed US prices fell in November for the first time in more than 3-1/2 years, underscoring the economy’s durability.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.18% higher, on course for a 1.6% gain this year. Japan’s Nikkei eased 0.07% but remains the best-performing Asian stock market with a 27% gain for the year.

Trading is likely to be thin on the day after Christmas with several markets, including those in Australia, New Zealand and Hong Kong closed for the Boxing Day holiday.

Meanwhile, the Pakistani rupee maintained its upward trajectory against the US dollar for the 10th consecutive session as it appreciated 0.06% on Tuesday. As per the State Bank of Pakistan, the local unit settled at 282.37 after an increase of Re0.16 against the greenback.

Volume on the all-share index edged lower to 670.8 million from 671.5 million a session before.

The value of shares increased to Rs17.1 billion from Rs13.7 billion in the previous session.

K-Electric Ltd was the volume leader with 97.3 million shares, followed by WorldCall Telecom with 72.5 million shares, and B.O.Punjab at 41 million shares.

Shares of 369 companies were traded on Tuesday, of which 43 registered an increase, 315 recorded a fall, while 11 remained unchanged.