Bearish sentiment took over the Pakistan Stock Exchange (PSX) on Thursday, with the market experiencing a significant decline of over 1,800 points. The KSE-100 index dropped by 1,365.18 points (1.21%) to 111,049.62 points by 12:17 pm, and further fell to 110,521.28 points by 2:05 pm.
Analysts cited several factors behind the downturn. Yousuf M. Farooq from Chase Securities attributed the decline to deteriorating relations with Afghanistan following a reported airstrike on terrorist camps, which led to market concerns. However, he noted that market yields still indicated potential for long-term returns.
Mohammed Sohail of Topline Securities pointed to rising leverage, the expiration of December contracts, and the ongoing security situation at the borders as contributing factors. Awais Ashraf from AKD Securities added that portfolio realignments at year-end and concerns over gas price unification were also influencing the market.
The previous day’s recovery was short-lived, as investors suffered a loss of Rs690 billion in a single day. Analysts noted profit-taking, uncertainty over political reconciliation talks, a weak rupee, and falling global oil prices as key reasons for the bearish trend. Despite this, some analysts advised building positions in sectors like E&P, fertilizer, cement, OMCs, autos, textiles, and technology, which are expected to benefit from easing monetary policy and declining commodity prices.
