Shares at the Pakistan Stock Exchange (PSX) traded in the red and lost more than 500 points, with the KSE-100 index closing at 63,737.46, down by 531.91 points from the previous close of 64,269.37. According to Yousuf M. Farooq, director of research at Chase Securities, the market is currently grappling with uncertainty in anticipation of the upcoming elections. However, he noted certain positive developments such as the reduction in petrol prices, coupled with the sustained strength of the Pakistani rupee, which were expected to significantly mitigate inflation in the coming months. Despite a robust rally in the market over the last six months, the prevailing political situation is now prompting a temporary pause, providing the market with an opportunity to recalibrate. As investors navigate these complexities, attention will be keenly focused on the evolving political landscape as it emerges as a key factor influencing the market’s short-term trajectory.
Mohammed Sohail, chief executive of Topline Securities, noted that Pak Suzuki Motor Company (PSMC) was the main player that traded lower than market expectations. Previously, the Voluntary Delisting Committee (VDC) at PSX had determined a minimum buyback price of Rs609 per share as against Rs406. Additionally, buy-back prices affected investor confidence today at the exchange. He added that mark-to-market losses in PSMC had an impact on other stocks as well, which means those who bought the stock on leverage needed to pay the difference in the price from the previous day.
The PSX’s bearish trend is a cause for concern for investors, but experts believe that the market will eventually stabilize. The reduction in petrol prices and the sustained strength of the Pakistani rupee are positive developments that could help mitigate inflation in the coming months. However, the upcoming elections and the prevailing political situation are factors that could influence the market’s short-term trajectory. Investors are advised to navigate these complexities with caution and keep a close eye on the evolving political landscape.