KSE-100 drops nearly 4% amid geopolitical uncertainty

Massive selling pressure was observed at the Pakistan Stock Exchange (PSX), with the benchmark KSE-100 Index shedding nearly 4% on Thursday.

The KSE-100 index opened significantly lower and continued to decline steadily throughout the day with minor rebounds, but buyers were unable to sustain any bullish momentum.

Selling pressure intensified throughout the final trading hours, pushing the benchmark index to an intra-day low of 171,647.33.

At close, the benchmark index settled at 172,170.29, a decrease of 6,682.80 points or 3.74%. This marks the highest-ever single-day decline, said Topline Securities (in terms of points at the KSE-100 Index), in a note.

“The market remains under pressure as rising oil prices and escalating US-Iran tensions dampened investor sentiment,” Saad Hanif, Head of Research at Ismail Iqbal Securities, told Business Recorder.

He added that apart from foreign investors, local investors also turned cautious, contributing to the selling pressure.

Meanwhile, Topline Securities attributed the pressure to persistent foreign corporate selling, which continued to dampen sentiment and keep investors on the sidelines.

“Adding to the negative tone, yesterday’s LIPI data showed local insurance companies emerging as major sellers, intensifying the downward momentum.

Market activity was further constrained by shortened trading hours following the commencement of Ramadan, which curtailed participation and amplified price swings amid thin volumes,” it added.

Index-heavy constituents FFC, ENGROH, UBL, OGDC, PPL, and MEBL led the decline, collectively eroding 2113 points from the benchmark, said Topline.

The Privatisation Commission Board (PC Board) under the chairmanship of Muhammad Ali, Adviser to the Prime Minister on Privatisation and Chairman, Privatisation Commission, constituted a Negotiation Committee to engage with the Asian Development Bank (ADB) to negotiate the terms of a potential Financial Advisory Services Agreement (FASA) in connection with the proposed privatisation of Islamabad International Airport (IIA).

On Wednesday, PSX staged a decisive recovery as aggressive buying propelled benchmark indices sharply higher, reversing a portion of the steep losses suffered in recent sessions. The rebound was supported by strong participation from both institutional and retail investors, as value-hunting emerged following the recent correction.

The benchmark KSE-100 Index closed at 178,853.10 points

Internationally, Asian stocks rose on Thursday, supported by gains in technology giants on Wall Street, while lingering US-Iran tensions kept oil prices supported and left gold underpinned by safe-haven flows.

In currencies, the dollar firmed after minutes from the Federal Reserve’s latest meeting showed policymakers were in no rush to cut rates.

Trading was thinned in Asia with markets in Hong Kong, China and Taiwan closed for the Lunar New Year holiday, but MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.5%, and Japan’s Nikkei gained 0.85%, led by technology shares.

South Korea’s Kospi jumped about 3% to a record high.

That followed a rise in shares of tech heavyweights on Wall Street, following news on Tuesday that it signed a multiyear deal to sell Meta Platforms millions of its current and future artificial intelligence chips.

Volume on the all-share index declined to 542.98 million from 697.68 million recorded in the previous close.

The value of shares decreased to Rs27.36 billion from Rs50.00 billion in the previous session.

WorldCall Telecom was the volume leader with 84.18 million shares, followed by K-Electric Ltd with 62.01 million shares, and Trust Sec. & Bro. (R) with 45.87 million shares.

Shares of 483 companies were traded on Thursday, of which 32 registered an increase, 384 recorded a fall, and 67 remained unchanged.