The Pakistan Stock Exchange (PSX) saw a slight dip on Friday, ending a six-day rally as the KSE-100 Index fell 327.60 points (0.28%), closing at 118,442.17. Despite early gains, profit-taking and investor caution pushed the market into the red.
Market Performance
The index fluctuated throughout the session, reaching a high of 119,405.91 before dropping to a low of 118,334.40. Trading volume stood at 172.2 million shares, with a total market value of Rs14.91 billion.
While the decline marked a pause in the recent uptrend, key sectors, including banking, oil and gas, and power, remained resilient. Investor sentiment was initially strong, with the index surging nearly 600 points in early trading before reversing course.
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Factors Behind the Drop
The downturn was largely driven by profit-taking after an extended rally. Investors booked profits following a strong market run fueled by optimism over Pakistan’s expected staff-level agreement (SLA) with the International Monetary Fund (IMF).
State Bank of Pakistan (SBP) Governor Jameel Ahmed reaffirmed that talks with the IMF were progressing well, though he did not provide a timeline for the agreement. The energy sector’s circular debt issue also remained a concern, as unresolved financial challenges could impact corporate cash flows.
Recent Market Surge
Thursday’s session saw the KSE-100 Index surpass the 119,000 mark, closing at 118,769.77, a record high after gaining nearly 800 points. This increase was fueled by hopes of economic recovery, IMF funding, electricity price cuts, and tax relaxations.
The government’s push to resolve circular debt was another positive factor. Investors were particularly active in oil, gas, and technology sectors, with Mari Petroleum experiencing strong trading amid speculation ahead of its board meeting.
Foreign and Local Investment Trends
Despite recent gains, foreign investors sold shares worth Rs720.8 million, while local mutual funds continued to drive market activity. Total trading volume surged to 667.9 million shares, with major gains in technology, oil & gas, fertilisers, and refineries.
Investor Outlook
Analysts remain optimistic about Pakistan’s economic outlook, but they advise caution. They suggest profit-booking at higher levels and recommend focusing on sectors with strong growth potential.
If the IMF agreement is secured, it could further stabilize market conditions and encourage fresh investment. For now, investors are keeping a close watch on economic policies, particularly government efforts to ease financial pressures on key industries.
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