Stocks underwent yet another day of stampede as the Pakistan Stock Exchange (PSX) witnessed its largest single-day plunge of 6,482.21 points on Thursday as fears of war between Pakistan and India intensified.
The market opened strong, reaching an intra-day high of 111,881.02, fears over escalating border tensions triggered another wave of panic selling. Trading was halted for an hour after the KSE-100 dropped nearly 7,000 points. Once trading resumed, the index continued its downward spiral, hitting an intra-day low of 101,598.90.
The massive sell-off followed the market's previous days of volatility, with investors increasingly fearful of a potential conflict. As geopolitical risks mounted, the market was gripped by panic, resulting in an unprecedented decline.
Arif Habib Limited economists Sana Tawfik told The Express Tribune, the market witnessed another session of bloodbath on Thursday, with the index shedding 6,482.21points, which is highest decline in terms of points, or -5.9% day-on-day amid ongoing tension on geopolitical front (India-Pakistan) and concerns over further escalation.
In a similar view, Topline Securities CEO Mohammed Sohail noted that the news of drone attacks by Indian in key Pakistan cities created panic in the market. Resultantly, selling coupled with margin calls added fuel to the fire in the bourse. Arif Habib Corp MD Ahsan Mehanti noted, "Stocks saw a historic decline amid fears of escalating tensions between Pakistan and India following unrest over recent surgical strikes."
Additionally, a weak rupee, economic uncertainty, and falling Pakistani dollar bonds were key catalysts behind the record bearish clos, he added.
At the close of trading, the benchmark KSE-100 index posted huge loss of 6,482.21points, or 5.89 %, and settled at 103,526.82.
Topline Securities wrote in its review that the market faced an unprecedented meltdown as investor sentiment remained deeply shaken throughout the session, which saw extreme volatility. The KSE-100 recorded its highest-ever intra-day movement of 10,282 points, swinging from an intraday high of 1,872 points to an intra-day low of 8,410 points.
Following the news that Pakistani forces had neutralised 25 drones sent by India since last night, sent shockwaves through financial markets, triggering widespread panic selling amid fears of escalating cross-border hostilities. Investors rushed to offload positions, leading to a broad-based decline across sectors, Topline added.
JS Global analyst Muhammad Hasan Ather wrote in his review, that the sharpest single-day decline following heightened military tensions between India and Pakistan triggered a wave of panic selling, wiping out billions in market value.
Temporary trading halts did little to calm investor nerves. Moving forward, market sentiment remained fragile, hinging on geopolitical developments. Ather anticipated that diplomatic de-escalation and stabilising confidence following the government's reassurances may prevent further downside in the coming sessions.
Arif Habib Limited (AHL) wrote in its report that the December 2024 lows around 105k were breached following the sharpest single-day percentage drop since 2020, as the KSE-100 fell 5.89% day-on-day (DoD). Only 4 stocks advanced while 95 declined, with Fauji Fertilisers (-5.1%), Mari Petroleum (-9.12%), and United Bank (-6.23%) contributing most to the index's slide.
Conversely, Pakgen Power (+8.48%), JDW Sugar Mills (+3.08%), and Pak-Gulf Leasing Company (+6.61%) went against bearish trend. Panic spread after Pakistan claimed to have shot down 25 hostile drones across several cities. Early gains were quickly erased as the market broke below Wednesday's low, breaching the second downside marker at the December 2024 floor, AHL added.
Overall trading volumes increased to 653.6 million sh84ares compared with Wednesday's tally of 550.2 million. Value of shares traded during the day was 3.54 billion.
Shares of 450 companies were traded. Of these, 35 stocks closed higher, 337 fell and 42 remained unchanged.
WorldCall Telecom was the volume leader with trading in 93.3 million shares, falling Rs0.12 to close at Rs1.10. It was followed by Kohinoor Spinning Mills with 28.5 million shares, shedding Rs0.93 to close at Rs3.94 and K-Electric Limited with 27.1 million shares, losing Rs0.3 to close at Rs3.92. During the day, foreign investors bought shares worth Rs476.9 million, the NCCPL reported.
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