The Pakistan Stock Exchange (PSX) ended its five-session winning streak on Tuesday, with the benchmark KSE-100 Index dropping more than 1,100 points as investors locked in profits following the market’s recent record-setting rally.
After opening on a positive note and touching an intraday high of 188,126.67 points, the market quickly reversed direction. Selling pressure intensified during the morning session, causing the index to lose nearly 1,500 points before 10am. Although the market recovered some losses later in the day, the benchmark ultimately closed at 186,255.55 points, down 1,199.14 points (0.64%) from the previous close of 187,454.69 points.
During the session, the KSE-100 also touched an intraday low of 186,189.21 points, reflecting heightened market volatility.
According to Topline Securities, widespread selling across major sectors emerged in the second half of the trading session. Investors adopted a cautious stance amid weakness in regional equity markets and chose to secure gains after the PSX’s strong rally over the past several days.
Heavyweight stocks including Fauji Fertilizer Company (FFC), Pakistan Petroleum Limited (PPL), United Bank Limited (UBL), Oil & Gas Development Company (OGDC), and Lucky Cement (LUCK) were the biggest contributors to the decline, collectively dragging the benchmark index down by nearly 649 points.
Despite Tuesday’s correction, Topline Securities maintained that Pakistan’s broader market outlook remains positive, supported by improving macroeconomic indicators and continued institutional investor interest.
Meanwhile, Awais Ashraf, Director of Research at AKD Securities, said the market remained under pressure throughout the day as investors opted for profit-taking with the index trading close to its all-time high.
He noted that investor sentiment weakened further after the market assessed that the impact of the recent reduction in the Minimum Deposit Rate (MDR) for banks would be less significant than initially expected.
The heaviest selling was witnessed in the oil and gas exploration, cement, fertiliser, and banking sectors, which collectively weighed on overall market performance.
Looking ahead, Ashraf remained optimistic about the PSX’s medium-term prospects. He expects inflation to decline into single digits in the coming months, strengthening expectations of an interest rate cut by the central bank.
According to him, monetary easing could become a major catalyst for the KSE-100 Index to surpass its previous all-time high. He also highlighted that the market continues to trade at an attractive forward price-to-earnings (P/E) ratio of 6.9x, suggesting further upside potential for investors.
