The Pakistan Stock Exchange (PSX), on Wednesday, experienced a sharp downturn as profit-taking erased all intra-day gains, pushing stocks into negative territory. The benchmark KSE-100 Index, which had surged to new highs earlier, fell back under selling pressure as investors cashed in on recent gains.
KSE-100 Index Slips After Scaling New Highs
At 2:55 pm, the KSE-100 Index was recorded at 90,182.16 points, representing a decrease of 681.93 points or 0.75%. Earlier in the day, the index reached an intra-day peak of 91,872.63 points before profit-taking began, reversing the positive momentum.
Despite the downturn, the day initially saw robust buying interest in sectors such as automobile assemblers, cement, chemicals, commercial banks, fertilizer, power generation, oil and gas exploration companies, and OMCs. High-performing stocks included index-heavyweights like HUBCO, OGDC, PPL, MCB, HBL, and MEBL, all of which traded positively in early hours.
Bullish Sentiment Driven by Corporate Results and Rate Cut Speculation
The PSX has shown strong bullish momentum in recent weeks, a trend experts attribute to robust corporate earnings that have boosted investor confidence. The anticipation of a potential policy rate cut by Pakistan’s central bank’s Monetary Policy Committee (MPC), set to meet next week, has further supported the ongoing rally. Many market analysts believe a rate cut could enhance liquidity and boost investor sentiment.
Correction Expected After Series of Record Highs
On Tuesday, the PSX continued its upward trajectory, with the KSE-100 Index climbing 668.57 points (0.74%) to close at a record high of 90,864.09 points. However, market observers had noted that a correction was likely, as the index has consistently hit new peaks with nearly every session.
Global Market Influence and US Election Jitters
Globally, Asian shares saw a downturn on Wednesday, influenced by weakness in Chinese markets as investors brace for the outcome of a tightly contested US presidential election. Analysts believe the election’s results could have significant consequences for the world’s second-largest economy. In an effort to stabilize growth, Beijing has been implementing measures to counter the impact of global economic uncertainties.
Gold and Bitcoin See Surge Amid Election Concerns
Meanwhile, gold prices rose to a record high as concerns over the US election spurred demand for safe-haven assets. Bitcoin also approached record levels, trading at $72,322.08, just shy of its peak of $73,803.25. Investors believe a victory for Republican candidate Donald Trump could benefit the cryptocurrency market, given his perceived favorable stance towards digital assets.
In early trading, MSCI’s broad index of Asia-Pacific shares (excluding Japan) declined by 0.22%, while Chinese markets also reflected investor caution in light of the impending US election results. The situation is expected to remain dynamic as both local and global factors continue to influence market trends.
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