PSX bounces back as political tensions ease

The Pakistan Stock Exchange (PSX) witnessed a strong rally on Wednesday as political tensions in the capital eased, following Pakistan Tehreek-e-Insaf’s (PTI) announcement to suspend its three-day protest in Islamabad.

The move significantly boosted investor sentiment, leading to a sharp increase in market activity.

The benchmark KSE-100 Index surged by 3,740.84 points, or 3.96%, closing at 98,315.19 points after hitting an intra-day high.

This marked a substantial recovery from the previous days of market volatility, attributed to the political unrest caused by PTI’s “do-or-die” protest, which had paralysed parts of Islamabad since November 24.

The rally came in the wake of PTI’s decision to temporarily suspend the protest, bringing relief to investors who had been cautious due to the ongoing uncertainty.

Market analysts attributed the uptick to positive sentiment among investors, who saw opportunities in the previous session’s slump.

“This rally reflects growing optimism, likely driven by expectations of economic stability,” said a Karachi-based trader.

In a turbulent session at the Pakistan Stock Exchange (PSX) on Tuesday, the KSE-100 index registered its largest-ever single-day drop as it plummeted 3,506 points, or 3.57%, due to rising political instability concerns among investors.

Analysts attributed the political instability to the ongoing protests being held by the Pakistan Tehreek-e-Insaf (PTI), compounded by weakening investor sentiment and foreign fund outflows.

Despite a strong performance by the banking sector, spurred by the State Bank of Pakistan's (SBP) withdrawal of the minimum deposit rate requirement for conventional banks, panic selling led to widespread losses across most of the sectors.