A day after experiencing a major decline, the Pakistan Stock Exchange (PSX) benchmark KSE-100 index rallied 7,000 points on Tuesday, recovering from the previous day’s losses.
Bearish sentiment had gripped the market on Monday, with the 100 index falling 4,600 points, wiping off Rs 534 billion from market capitalisation, amid rising tensions with Afghanistan, political instability in Khyber Pakhtunkhwa and violent protests in Punjab. The market had closed at 158,443 points, down 4,654 points, or 2.85 percent.
Today, the KSE-100 index rose 7,032.6 points, or 4.44%, to close at 165,476.02 points.
Of the 483 active bonds, 391 advanced, 69 fell and 23 remained unchanged.
Yousuf M. Farooq, director of research at Chase Securities, said sunrise.com that the market had recovered today as “tensions with Afghanistan and internal unrest following the breakup of the Tehreek-i-Labbaik Pakistan (TLP) protests had subsided overnight.”
“After entering a corrective phase following trade data released on October 2, participants are now focusing on next week’s current account results and progress towards a staff-level agreement with the International Monetary Fund,” he said.
Stating that 12,334 new investor accounts were opened in the month of September, Farooq suggested that retail investors take a “long-term approach, build positions gradually and consider exchange-traded funds or mutual funds if they are inexperienced.”
“While valuations are reasonable, a potential current account and fiscal slippage could pose headwinds in the near term, and a repeat of the past two years’ returns in the next two years appears unlikely,” he added.
Samiullah Tariq, head of research and development at Pak Kuwait Investment Company Ltd, said the market had “recovered after the correction”.
He also said that the “easing of geopolitical conditions” had supported the market.
Heavy border fighting between Pakistan and Afghanistan that began Saturday night and continued into Sunday morning cast a shadow over the stock market yesterday. The Inter-Services Public Relations (ISPR) said 23 soldiers were martyred and 200 Taliban and affiliated terrorists were killed as Islamabad responded to Kabul’s aggression.
On the other hand, the crackdown on Tehreek-i-Labbaik Pakistan (TLP) protesters in several cities and political uncertainty in Khyber Pakhtunkhwa had added more pressure.
