The keyword Pakistan Stock Exchange dominated headlines on Thursday as the market witnessed heavy profit-taking. The benchmark KSE-100 Index, which had touched record highs a day earlier, shed more than 1,300 points, closing deep in the red despite starting on a strong note.
Market Starts Strong, Ends Weak
Trading began with optimism as the benchmark KSE-100 surged to an intra-day high of 151,249.62 points. Investors initially pushed the index higher, extending momentum from Wednesday’s record closing. However, by midday, profit-taking gripped the market. The index lost steam and dropped sharply, hitting an intra-day low of 148,272.57 points.
At the closing bell, the KSE-100 Index settled at 149,235.26 points, recording a decline of 1,355.74 points or 0.90%.
Analysts Explain the Dip
Sana Tawfik, Head of Research at Arif Habib Limited, noted that the fall was expected after the market’s strong run. “The decline is largely attributable to profit-taking after a recent rally,” she said.
Despite the correction, Tawfik maintained that the overall mood of the market remains positive. Corporate results continue to drive investor attention, while expectations for a circular debt resolution are keeping sentiment steady.
Waqas Ghani, Head of Research at JS Global, echoed the same view. He said, “Some profit-taking is natural after such gains.”
Rally Before the Correction
The correction followed Wednesday’s historic session when the KSE-100 Index closed at an all-time high of 150,591 points. That session had added 820 points, or 0.55%, pushing the index into uncharted territory. The pullback on Thursday was therefore seen by many as a natural pause in a broader upward trend.
Global Market Trends
Global equity markets presented a mixed picture on Thursday, adding to cautious investor behavior.
In Asia, Japan’s Nikkei slipped 0.6% in morning trading, extending its retreat from the record levels reached earlier in the week. While chipmaker Advantest rose 3%, Tokyo Electron lost 2%, showing a split among technology stocks.
South Korea’s KOSPI rebounded 0.9% after touching a six-week low on Wednesday. Australia’s benchmark index rose 0.6%, renewing its record high. Mainland Chinese blue chips also gained 0.5%, but Hong Kong’s Hang Seng index remained flat.
In the US, the tech sector weighed on overnight trading. The Nasdaq Composite dropped 0.7%, while the S&P 500 slipped 0.2%. Futures for both indices suggested a weaker open, with Nasdaq futures down 0.2% and S&P 500 futures lower by 0.1%.
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Investors Eye Fed Rate Cut
Global traders continue to focus on the US Federal Reserve’s next move. Market odds suggest about an 80% chance of a quarter-point rate cut on September 17. Investors are also pricing in a total of 52 basis points in cuts over the rest of the year. Expectations of easing are keeping global equities somewhat resilient despite the recent volatility.
Rupee Continues to Strengthen
While the stock market corrected, the Pakistani currency continued its steady climb. The rupee gained for the 10th straight session against the US dollar. At the close of interbank trading, the rupee settled at 281.92, marking an increase of Re0.03.
The currency’s persistent strength has boosted overall investor confidence and provided some cushion against global market uncertainties. Analysts believe that recent measures against currency smuggling and black market activity have helped stabilize the exchange rate.
Outlook for PSX
Despite Thursday’s fall, market watchers remain confident in the medium-term outlook of the Pakistan Stock Exchange. The ongoing corporate result season is expected to drive further activity, while structural reforms such as addressing circular debt could provide new momentum.
Analysts suggest that corrections like Thursday’s are healthy for long-term growth. They prevent overheating and allow new investors to enter at more attractive levels. The combination of strong earnings, currency stability, and policy reforms could keep the KSE-100 Index on an upward path once the wave of profit-taking subsides.
A Pause Before the Next Move
The Pakistan Stock Exchange’s sharp pullback reflects the natural ebb and flow of investor sentiment. While the KSE-100 shed over 1,300 points, underlying optimism remains intact. With global cues, corporate results, and domestic reforms all in play, the market may view this correction as a pause before the next upward move.
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