PSX nosedives by over 2,000 points

Market experiences panic selling by investors

KARACHI:

The Pakistan stock market plunged by over 3.4% or over 2,200 points, slipping below 63,000 points during the late trading hours on Tuesday, as the drive for profit-taking turned into panic selling on uncertainty related to the forthcoming general elections.

In the past two days, the Pakistan Stock Exchange's (PSX) benchmark KSE-100 Index cumulatively lost over 4.6% or 3,200 points. The index was hovering at 62,996 points at around 2pm.

Pak-Kuwait Investment Company Head of Research Samiullah Tariq said the market was in profit-taking mode and added that there was big room for correction, as the benchmark index had surged over 12,000 points in the past one month-and-half-month to over 66,000 points till last week.

Market talked suggested uncertainty related to the forthcoming general elections and the feeling of gloom prevalent transformed the profit-taking drive into panic selling which has resulted in a sharp slump in the market.

A section of investors had bought shares with borrowed money amounting to over Rs40 billion. The profit selling forced them to offload the holdings to avoid heavy losses. This also contributed towards the panic selling.

Moreover, Chinese investors have said they would wait for the next elected government to execute investment plans for Pakistan.

Tariq, however, believed this was profit-selling only. The market should settle at around the 63,000-64,000 points level under the current spell. "This is year-end time, and the market may try to consolidate at around current levels to end on a positive note."

Penny stocks from the power, telecom and technology, banking and energy sectors were the top volume leaders which were being sold.

Earlier, leading research houses projected the benchmark index hitting growing 30-35% over the next year to around 75,000-81,000 points by December 2024.

They said the forthcoming general elections, likely deceleration in elevated inflation and a sharp cut in the central bank benchmark policy rate would support the expected rally during 2024.