Investors resorted to profit-taking at the Pakistan Stock Exchange (PSX) as the benchmark KSE-100 Index underwent a major correction and closed lower by 1.73% on Wednesday.
The KSE-100 started the session positive as it briefly topped 67,000 for first time in history.
However, a selling spree later erased the gains and pushed the index below 66,000.
At close, the benchmark index settled at 65,280.16, down by 1,146.62 points or 1.73%.
Sectors which contributed in the across-the-board selling included commercial banks, fertilizer, technology and communications, E&P, OMC, and cement.
On Tuesday, the KSE-100 had rebounded as it gained 414 points, ahead of the monetary policy announcement, to settle at 66,426.78.
Mohammed Sohail, CEO Topline Securities, termed the selling on Wednesday a “much-needed correction”.
“Highly leveraged position and some selling by local institutions created this sell-off,” Sohail said in a note. “This is a much-needed correction as we have seen non-stop rally at PSX,” he added.
Similar sentiments were expressed by other experts.
“The bearish sentiment comes on account of profit-taking,” Sana Tawfik, analyst at Arif Habib Limited (AHL), told Business Recorder.
Tawfik said volatility on the political front is also driving negativity at the bourse.
A six-member bench in the Supreme Court (SC) on Wednesday suspended the verdict of nullifying military trials of civilians accused in May 9 riots by a 5-1 majority.
The case is related to the military trials of the civilians accused in the May 9 riots after the arrest of former prime minister Imran Khan in which the protesters damaged several military and state installations.
Meanwhile, Tawfik said most investors were expecting a status quo in the policy rate, thus the decision by the State Bank of Pakistan (SBP) Monetary Policy Committee (MPC) on Tuesday was in line with market expectations.
The MPC of the central bank kept the key policy rate unchanged at 22%.
“The decision does take into account the impact of the recent hike in gas prices on inflation in November, which was relatively higher than the MPC’s earlier expectation,” SBP said in a statement.
Meanwhile, in a landmark development, Aramco, one of the world’s leading integrated energy and chemicals companies, on Tuesday signed definitive agreements to acquire a 40% equity stake in Gas & Oil Pakistan Ltd. (“GO”).
The Pakistani rupee registered back-to-back gains against the US dollar as it appreciated 0.06% in the inter-bank market on Wednesday. As per the State Bank of Pakistan, the local unit settled at 283.61 after an increase of Re0.17 against the greenback.
Volume on the all-share index jumped to 1,358.4 million from 969.6 million a session before.
The value of shares also rose to Rs37.6 billion from Rs26.9 billion in the previous session.
WorldCall Telecom remained the volume leader with 153.6 million shares, followed by B.O.Punjab with 106.2 million shares and K-Electric Ltd. with 90 million shares.
Shares of 412 companies were traded on Wednesday of which 93 registered an increase, 304 recorded a fall, while 15 remained unchanged.
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