On Tuesday, political instability over the PTI protests in Islamabad pushed panic selling, which has plunged the Pakistan Stock Exchange (PSX) to the worst-ever recorded loss in a single session. It saw the KSE-100 Index take a dip of 3,505.62 points or 3.57%. It is one of the biggest falls in the stock exchange history as it has closed at 94,574.16.
It began with a positive start, where the index briefly touched an intraday high of 99,819.59 points, and law and order started to break down, sending fear into the market. Heavy selling by mutual funds and foreign investors added to the losses and pushed the index to an all-time low of 94,180.60 points before it recovered marginally.
Insight Securities Sales Head Ali Najib called the event Pakistan’s “Black Tuesday.”He attributes the fall to political unrest and widespread demonstrations that scared investors and forced massive sell-offs in all critical sectors including banking, technology, and energy.
Market activity surged with a 74.35% rise in trading volumes to 1.12 billion shares and the value traded surged 68.95% to Rs43.29 billion. K-Electric, The Bank of Punjab, and Hascol Petroleum led the way on the volume chart. The ones at the receiving end were Rafhan Maize and Unilever Foods.
Market capitalization plummeted by Rs481 billion, and analysts are sounding cautionary warnings about further slides if political tensions continue. According to Topline Securities Chief Executive Mohammed Sohail, political stability is the need of the hour for the market to bounce back. The index may test the lower thresholds of 92,500 or 90,000 points in the days ahead.
Despite the gloomy outlook, analysts said that political clarity may bring back hope in terms of recovery. Time and again, markets have learned to rebound from shocks to give long-term investors ample time to focus on quality assets. For now, the watchword remains cautious against navigating through this choppy period.
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