Pakistan stocks open on bullish note but gains short-lived

Stockbrokers monitor the latest share prices at the Pakistan Stock Exchange (PSX) in Karachi on July 3, 2023. (AFP/File)

• Index recorded intraday high of 1,789 points and intraday low of 2,258 points before closing at 108,896 points
• Index experienced volatile trading session as KSE-100 index oscillated within a massive 4,000 point range

ISLAMABAD: The Pakistan Stock Exchange (PSX) crossed 111,000 points during intra-day trading on Tuesday, but the benchmark KSE-100 index closed in the red, plunging 1,073.73 points, or -0.98%, from the previous close to settle at 108,896.65 points.
The index climbed 1,482.06, or 1.35%, to stand at 111,452.44 points at 10:55am from the previous close of 109,970.38 points. 
“The index experienced a volatile trading session as the KSE-100 Index oscillated within a massive 4,000 point range,” Topline Securities said in its daily market review.
“The much-needed profit booking took center stage, with the index recording an intraday high of 1,789 points and an intraday low of 2,258 points before closing at 108,896 points.”
The review said the session began on a bullish note, driven by robust buying interest in key sectors following encouraging macroeconomic developments. 
“However, the gains were short-lived as investors opted to lock in profits, especially in heavyweight sectors, leading to a sharp intraday decline. Despite the turbulence, the market managed to close off its lows, signalling underlying investor confidence,” Topline said. 
Analysts credited the intraday rally to positive sentiment prevailing in the market amid an optimistic overall outlook.
“Not unusual to see profit-taking come through after the steep recent increase,” Raza Jafri, head of equities at Intermarket Securities, told Arab News. “The overall outlook remains bullish though on reducing interest rates and the government’s commitment to reforms.”
The State Bank has slashed interest rate by 700 basis points (bps) in four consecutive meetings since June, bringing it to 15%.
According to a poll by Topline Securities, 71% of participants expect the central bank to announce a minimum rate cut of 200bps at the upcoming Monetary Policy Committee meeting on Dec. 16.
Arif Habib Corporation CEO Ahsan Mehanti said stocks remained bullish during intraday trading after National Savings Schemes rates were cut, amid speculation of further reductions.
“Robust economic indicators, rupee stability and recovery in global equities on receding geo-political tensions played a catalyst role in record surge at the PSX,” he told Arab News.
Pakistan’s annual consumer inflation also dropped to 4.9 percent in November, below government projections, primarily due to a high base from the previous year. This marked a decline from 7.2 percent in October and a significant fall from the nearly 40 percent multi-decade high recorded in May 2023.