On Tuesday, the Pakistan Stock Exchange (PSX) witnessed a tumultuous day as bears took control, resulting in the most significant single-day decline in the market. The benchmark KSE-100 index experienced a staggering drop of over 2,500 points, reaching a low of 59,170.97 points—a 4.11% decrease from the previous close. This decline, as reported by the PSX website, is marked as the highest-ever for the KSE-100 index, plummeting by 11% from its peak of 66,427 points, according to Arif Habib Limited, a Karachi-based brokerage firm.
Raza Jafri, Head of Equities at Intermarket Securities, attributed the market turmoil to the ongoing unwinding of leveraged positions, although he noted that trading volumes remained relatively thin. Jafri expressed optimism that the corrective phase might conclude by the end of the week, with expectations for a more positive start in January.
Khurram Schehzad, CEO of Alpha Beta Core financial advisory firm, characterized the day as a “Black Tuesday” for the PSX, indicating the severity of the market’s downturn. This terminology is commonly used to describe a day of significant financial losses.
Samiullah Tariq, Head of Research at Pakistan-Kuwait Investment, identified various factors contributing to the market fluctuations, including a year-end correction and profit-taking. Year-end corrections often occur as investors adjust their portfolios before the close of the fiscal year, and profit-taking involves selling assets to secure gains made during a period of growth.
The sharp decline in the PSX on Tuesday can be attributed to a combination of factors, including unwinding leveraged positions, year-end corrections, and profit-taking. The situation has garnered attention from financial experts who are cautiously optimistic about a potential turnaround in the market in the coming weeks.
