A volatile session was witnessed at the Pakistan Stock Exchange (PSX) on Tuesday as the benchmark KSE-100 Index settled with a fall of over 1,300 points, but after briefly crossing the 117,000 level early on in the trading session.
A mixed trend was seen at the bourse with the benchmark KSE-100 Index hitting an intra-day high of 117,039.17.
However, profit-taking erased all gains, with the index then hitting an intra-day low of 113,688.54.
At close, the benchmark index settled at 114,860.68, a decrease of 1,308.73 points or 1.13%.
“The market witnessed extreme volatility throughout the day as investors digested the Monetary Policy Committee’s (MPC) latest decision,” brokerage house Topline Securities said in its post-market report.
“Profit-taking gained momentum in the latter half of the session, amplifying volatility and further pressuring the market downward,” it added.
Selling was seen on Tuesday in key sectors including oil and gas exploration companies, OMCs, power generation, fertilizer, cement, chemical and automobile assemblers. Whereas, buying interest was observed in commercial banks.
Index-heavy energy stocks including MARI, OGDC, PPL and PSO traded in the red, whereas, banking stocks including HBL, MCB, MEBL, UBL and NBP traded in the green.
The market sentiment follows the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) reducing the key policy rate by 200 basis points to 13%. This marked the fifth successive cut since June 2024 when the rate stood at 22%.
“At its meeting, the Monetary Policy Committee (MPC) decided to cut the policy rate by 200 bps to 13%, effective from December 17, 2024,” the MPC said in its statement.
“Headline inflation declined to 4.9% y/y in November 2024, in line with the MPC’s expectations. This deceleration was mainly driven by continued decline in food inflation as well as the phasing out of the impact of the hike in gas tariffs in November 2023.
“However, the Committee noted that core inflation, at 9.7%, is proving to be sticky, whereas inflation expectations of consumers and businesses remain volatile. To this effect, the Committee reiterated its previous assessment that inflation may remain volatile in the near term before stabilizing in the target range.”
The selling pressure comes as the market had factored in a cut of 200 basis points, and there were no surprises in the MPC announcement.
However, on Monday, the benchmark KSE-100 Index settled above 116,000 for the first time in history with a gain of nearly 1,900 points or 1.7% in anticipation of the MPC meeting.
Internationally, Asian stocks edged higher and the dollar held firm on Tuesday as traders braced for a slate of central banks meetings this week that is likely to see the US Federal Reserve deliver a rate cut and the Bank of Japan stand pat for now.
Bitcoin, the best-known and the biggest cryptocurrency, remained nestled near the record high of $107,821 it touched on Monday.
In stock markets, Australian market was 0.75% higher, with Japan’s Nikkei up 0.26% and tech-heavy Taiwan stocks rising 0.5%.
That left MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.18%.
Meanwhile, the Pakistani rupee saw a marginal decline against the US dollar, depreciating 0.04% in the inter-bank market on Tuesday. At close, the currency settled at 278.27 for a loss of Re0.10 against the greenback.
Volume on the all-share index decreased to 1,252.98 million from 1,470.66 million on Monday.
The value of shares declined to Rs62.72 billion from Rs66.63 billion in the previous session.
WorldCall Telecom was the volume leader with 151.92 million shares, followed by Pak Elektron with 107.50 million shares, and Cnergyico PK with 58.28 million shares.
Shares of 470 companies were traded on Tuesday, of which 134 registered an increase, 297 recorded a fall, while 39 remained unchanged.
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