Pakistan-Stock-Exchange-PSXMarket players responded negatively on Wednesday to Pakistan’s string of negative news, sending the KSE-100 down by 2.01% or 908 points, to close near 44,300, a low last seen in April 2021.
China’s increasing power crunch also affected the benchmark KSE-100, which followed Wall Street’s overnight losses and saw Shanghai and Hong Kong shares fall on Wednesday, as investors fled Chinese stocks exposed to plant closures, including chemicals and steelmaking.
The KSE-100, largely considered as the benchmark, fell over 1,300 points by midday on Wednesday until a slight recovery pushed the index beyond the 44,000 mark, following a laid-back start. With a loss of 908.19 points, or 2.01%, the KSE-100 closed at 44,366.74 points. The index dropped after rising by 457 points the day before.
Among the 560 stocks traded on Wednesday, 60 saw gains, 489 saw losses, and 11 saw no change in value. Banks (169.15 points), technology and communication (117.30 points), and cement were among the sectors that kept the benchmark KSE-100 Index from falling any further (113.51 points).
There was an increase in trading volume on the all-share index from Tuesday to Wednesday, going from 364.86 million to 468,76 million. Additionally, the market capitalization of shares traded grew dramatically during the day, rising to Rs16.4 billion from Rs14.03 billion on Tuesday.
With 52.43 million shares outstanding, Telecard Limited led the pack, followed by WorldCall Limited and Dolmen City, which each had 51.19 million shares outstanding.
A bill introduced by US senators seeks an investigation into the Taliban’s recent takeover of Afghanistan, as well as Pakistan’s role before and after the fall of Kabul. The proposed measure mandates the US secretary of state to report to the proper congressional committees on entities supporting the Taliban.
Experts believe the incident signals a warming in US-Pakistan relations. This, they claim, dragged down the market on Wednesday.
“The (US-Pakistan) relationship has soured as Pakistan defends its involvement and unfairly blames Afghanistan’s quick Taliban capitulation. Trust takes time,” tweeted A.H. Soomro, MD of KASB Securities. “But the bonds must be repaired. In order to get off the FATF grey list, attract international investors, and maintain exports intact, Pakistan needs US cooperation, he added.
With a widening current account deficit, rupee devaluation, and the State Bank of Pakistan raising interest rates, the KSE-100 Index has been under pressure for several weeks. On Wednesday, the rupee fell against the dollar for the sixth day in a row.
As economic uncertainty mount ahead of the US Federal Reserve’s next scheduled tightening, so do fears about persistent inflation.
