KARACHI – The Pakistan Stock Exchange (PSX) faced accelerated selling pressure on Friday, with the benchmark index shedding more than 1,200 points in intraday trade, which most analysts attributed to political noise.
According to the PSX website, the KSE-100 index declined by 1206.1 points, or 1.47 percent, dropping to 80,633.76 from the previous close of 81,839.86.
“Recent political noise seems to have led to some profit-taking as the PSX has rallied more than 28 percent during the year,” said Amreen Soorani, head of research at JS Global.
Shahab Farooq, director of research at Next Capital Limited, attributed the bearish momentum to “general profit-taking amid political noise.”
Regarding the next Monetary Policy Committee (MPC) meeting, Farooq said, “A further cut in the policy rate in the upcoming MPC meeting, with July inflation expected around 11.5 percent, along with the corporate results season, may resume investors’ confidence — keeping political risk aside.”
Saad Ali, Intermarket Securities Director of Research, said that he believes the drop was partly due to profit taking after a strong rally since news of the International Monetary Fund (IMF) programme.
“But recent increase in political noise after the Supreme Court decision on reserved seats may have dampened investor sentiment. Some corners of the market may be factoring in a pause in monetary easing in the July MPC.”
Yousuf M Farooq, director of research at Chase Securities, stated, “The market has corrected on increasing political noise in the country. It is important to note that the index has seen a sharp rally on the back of a stabilizing economy, lower inflation, improved current account, and the expectation of lower interest rates,” adding that they expect the stabilization to continue with the board approval of the next International Monetary Fund (IMF) programme.
