A day after experiencing a significant downturn, the Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index rebounded during intraday trade on Tuesday, gaining over 5,000 points and recouping the previous day’s losses.
Bearish sentiment had taken hold of the market on Monday, with the 100-Index plummeting 4,600 points, wiping out Rs534 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, lower by 4,654 points, or 2.85 per cent.
Today, the KSE-100 index surged 5,054.50 points, or 3.19pc, to 163,497.92 by 2pm.
Yousuf M. Farooq, director of research at Chase Securities, told Dawn.com that the market had rebounded today as “tensions with Afghanistan and domestic unrest following the breakup of Tehreek-i-Labbaik Pakistan (TLP) protests had eased overnight”.
“After entering a corrective phase following the trade data released on October 2, participants are now focused on next week’s current account print and progress toward 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 inexperienced”.
“While valuations are reasonable, potential slippage on the current account and fiscal side could pose near-term headwinds, and a repeat of the last two years’ returns over 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 “rebounded after correction”.
He also said the “easing of geopolitical conditions” had supported the market.
Intense border fighting between Pakistan and Afghanistan that started late on Saturday night and continued into Sunday morning cast a shadow over the bourse yesterday. The Inter-Services Public Relations (ISPR) said 23 troops were martyred and 200 Taliban and affiliated terrorists were killed when Islamabad responded to aggression by Kabul.
Separately, a crackdown against protesters of the Tehreek-i-Labbaik Pakistan (TLP) in multiple cities and political uncertainty in Khyber Pakhtunkhwa had added more pressure.
