KARACHI: The Pakistan Stock Exchange (PSX) saw a dramatic reversal on Thursday after reaching an unprecedented high above the 150,000-point mark overnight.
Panic-selling ensued following the Supreme Court’s decision to grant bail to former Prime Minister Imran Khan in the May 9 cases, which stoked fears of heightened political instability and uncertainty among investors.
Ali Najib, Deputy Head of Trading at Arif Habib Ltd, noted that after three consecutive sessions of gains, the PSX finally succumbed to profit-taking, pushing the KSE-100 index into the red. The index closed at 149,225 points, down by 1,346 points or 0.90%.
The session began on a positive note, with the index hitting an intraday high of 151,250 points, up by 659 points, reflecting a continuation of bullish momentum. However, political news surrounding Imran Khan’s bail triggered a sharp market downturn. The index plummeted to an intraday low of 148,273 points, a drop of 2,319 points, as investor sentiment soured.
The volatility was somewhat contained after a clarification that Khan would remain in custody, which helped restore some calm to the market. By the close of the session, the KSE-100 index managed to recover a portion of its earlier losses.
Overall, market participation was strong, with total trading volumes surpassing 1 billion shares. A total of 1.061 billion shares were traded, generating a turnover of Rs55.7 billion. Fauji Foods emerged as the volume leader, with 62 million shares changing hands.
The correction in the KSE-100 index was widely anticipated, driven by growing concerns over political uncertainty. Market analysts suggest that further consolidation or correction cannot be ruled out in the near term.
Ahsan Mehanti of Arif Habib Corporation explained that investor sentiment was also impacted by the flat performance of government bond yields in the recent T-bill auction, which fuelled concerns about inflationary pressures and rupee instability. Additionally, apprehensions about external debt, the financial health of state-owned enterprises (SOEs), and the upcoming IMF review for the release of the third tranche under the Extended Fund Facility contributed to the bearish market close.
The day’s volatility was reflected in sector performance, with gains in stocks such as The Searle Company, Oil and Gas Development Company, and Systems Ltd, which collectively contributed 210 points to the index. However, this was offset by significant declines in stocks like Meezan Bank, Habib Bank, Engro Corporation, Bank Al-Habib, and MCB Bank, which together dragged the index down by 636 points.
Published in Dawn, August 22nd, 2025