Stock Market's Partial Recovery Falls Short, Ends Near 3,500-Point Decline (Pakistan's KSE-100 Index)
Pakistan Stock Exchange Plummets, Recovers Slightly Amid Geopolitical Tensions
In a turbulent trading session, the Pakistan Stock Exchange's (PSX) benchmark KSE-100 Index took a massive hit, losing over 6,500 points at the opening on Wednesday, though it recovered some ground later in the day. The index still closed with a significant loss of over 3,500 points.
The initial plunge was largely due to negative contributions from key stocks, such as LUCK, HUBC, UBL, SYS, and ENGROH. Collectively, these stocks dragged the index down by a staggering 967 points, according to brokerage house Topline Securities.
However, the sharp rebound of over 4,500 points towards the end of the day signaled underlying market confidence. This confidence was fueled by strong economic fundamentals and expectations that the geopolitical tensions would de-escalate quickly following a comment by the United States Secretary of State.
Meanwhile, the heaviest fighting in over two decades erupted between Pakistan and India, with shelling and gunfire over the frontier in Kashmir and India striking targets inside Pakistan. At least 26 Pakistanis were martyred and 45 were injured in Indian missile attacks at six locations.
The escalating military tensions were a significant factor contributing to the KSE-100 Index's volatility. India launched retaliatory strikes and deployed military assets, which was perceived as a significant escalation by the Pakistani side. The National Security Council authorized the Pakistan armed forces to retaliate in kind, while US President Donald Trump denounced the recent Indian strikes as a "shame."
Investors appear to be optimistic about the upcoming International Monetary Fund (IMF) board meeting, which will decide on the loan tranche for Pakistan. China also cut interest rates and vowed to support its stock markets, while US stock futures and Chinese markets rose in response to a meeting between top U.S. and Chinese trade officials.
Interestingly, despite the significant volatility, the Pakistani rupee posted a marginal decline against the US dollar. The local currency settled at 281.47, a loss of 0.1% against the greenback, on Wednesday. However, the volume on the all-share index increased substantially, reaching 550.08 million shares from 420.55 million recorded in the previous close. The value of shares rose to Rs30.12 billion from Rs23.70 billion in the previous session.
- The KSE-100 Index's decline on Wednesday was mainly due to negative contributions from stocks like LUCK, HUBC, UBL, SYS, and ENGROH, collectively dragging the index down by 967 points.
- The initial plummet of the Pakistan Stock Exchange's (PSX) index was followed by a sharp rebound of over 4,500 points towards the end of the day, indicating underlying market confidence.
- Geopolitical tensions between Pakistan and India, marked by heavy fighting in Kashmir and missile attacks, significantly contributed to the KSE-100 Index's volatility.
- Pakistan's National Security Council authorized the armed forces to retaliate in kind, while US President Donald Trump denounced the recent Indian strikes as a "shame."
- Despite the significant volatility in the stock market, the Pakistani rupee posted a marginal decline against the US dollar, settling at 281.47 on Wednesday.
- Investors appear optimistic about the upcoming International Monetary Fund (IMF) board meeting, which will decide on the loan tranche for Pakistan.
- China's move to cut interest rates and support its stock markets, along with an uptick in US stock futures and Chinese markets, has been influenced by a meeting between top U.S. and Chinese trade officials.
