Donald Trump’s victory in the US election threw market participants into a selling frenzy as profit-taking in the second half erased intra-day gains, pushing the index to close lower by 283 points on Wednesday.
The KSE-100 started the session positive, hitting a record intra-day high of 92,966.95.
However, as reports emerged related to projected victory of Donald Trump in the US election for the 47th president, profit-taking kicked in to erase to the intra-day gains and pushed the index to an intra-day low of 91,891.47.
At close, the benchmark index settled at 92,021.44, down by 282.88 points or 0.31%.
Trump’s presidency is largely being seen as a change in policy at the White House with some experts calling it an overall negative for Pakistan’s economy.
“It is a knee-jerk reaction from investors amid reports that Republican candidate Donald Trump has won the US presidency,” Sana Tawfik, Head of Research at Arif Habib Limited (AHL), told Business Recorder.
The analyst said uncertainty regarding what policies will be implemented by Trump, particularly with respect to Pakistan-US ties, is playing on the investor minds.
“However, the impact is expected to be temporary as economic fundamentals remain strong,” she added.
Earlier, buying was witnessed in key sectors including automobile assemblers, cement, commercial banks, OMCs, power generation and refinery.
Wednesday’s session comes after the PSX has seen a bull run in recent weeks with market experts attributing the optimism to the State Bank of Pakistan’s (SBP) recent policy rate cut of 250bps, bringing the interest rate down to 15%.
This aggressive monetary easing has spurred investor interest, reflected in heightened buying at the PSX.
On Tuesday, the benchmark index hit new highest-ever level amid buying mainly led by local investors coupled with institutional support. The KSE-100 Index increased by 366.32 points or 0.40% and crossed the historic 92,000 psychological level to close at 92,304.32, its highest-ever level.
Internationally, the US dollar surged and bitcoin hit a record high on Wednesday while equity markets advanced as traders bet on a victory for Trump.
Bitcoin piled almost $6,000 higher to a record $75,005.06, topping its previous peak of $73,797.98 hit in March.
Trump pledged during the campaign to make the United States “the world capital of bitcoin and cryptocurrencies”.
Meanwhile, the Pakistani rupee registered a marginal decline against the US dollar, depreciating 0.02% in the inter-bank market on Wednesday. At close, the currency settled at 277.89, a loss of Re0.05 against the greenback.
Volume on the all-share index jumped to 889.17 million from 752.66 million on Tuesday.
However, the value of shares declined to Rs30.47 billion from Rs32.83 billion in the previous session.
B.O.Punjab was the volume leader with 88.68 million shares, followed by Cnergyico PK with 71.64 million shares, and Power Cement with 39.15 million shares.
Shares of 452 companies were traded on Wednesday, of which 200 registered an increase, 200 recorded a fall, while 51 remained unchanged.
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