KARACHI: In a dramatic turn of events, the Pakistani equity market showcased remarkable resilience, recovering swiftly on Wednesday after a sharp plunge of over 1,400 points attributed to escalating tensions at the Pak-India borders.
The benchmark KSE-100 index, which initially witnessed a staggering decline from 41,767 points, ultimately closed at 38,693 points, marking a decline of 129 points from the previous day’s closing at 38,822 points. Analysts at Arif Habib Limited revealed that the market had experienced a steep descent, reaching a significant low of 37,330 points during the crisis, reminiscent of levels before the recent bullish rally.
The downturn was triggered by a crisis of confidence arising from the border confrontation with India, exacerbated by heightened tensions following the Pakistan Air Force’s action in taking down Indian planes. The resultant atmosphere of uncertainty saw a broad-based decline in scrips, affecting various sectors as leveraged positions suffered in the wake of the geopolitical turmoil.
Recovery began to set in notably after a press conference by the Director General of Inter-Services Public Relations (DG ISPR) and gained further momentum following a reassuring address by the Prime Minister in the closing half-hour of trading. The unadjusted closing showed a positive trend of +36 points; however, the KSE-100 index’s unadjusted closing reflected a decline of -129 points.
Sectors that contributed to the market’s performance included O&GMCs (-25 points), Cement (-20 points), Autos (-18 points), Pharma (-17 points), Technology (-12 points), and Tobacco (+27 points). Notably, the Oil & Gas Marketing Companies (O&GMCs) and Cement sectors faced the brunt of the decline.
Market activity witnessed a significant uptick, with volumes surging from 162 million shares to 274 million shares, representing a 69 percent day-on-day increase. The average traded value also rose by 48 percent, reaching US$ 74 million compared to the previous day’s US$ 50 million.
Key contributors to trading volumes included BOP, KEL, FCCL, EPCL, and LOTCHEM, collectively forming 33 percent of the total volumes traded. Among the stocks that contributed positively to the market were PAKT (+27 points), PPL (+26 points), HBL (+16 points), BAHL (+11 points), and MEBL (+10 points). Conversely, stocks that made a negative impact included MCB (-25 points), OGDC (-19 points), INDU (-12 points), KEL (-10 points), and HASCOL (-9 points).
The market’s rebound indicates a degree of resilience amid geopolitical uncertainties, emphasizing the role of official statements in calming investor nerves. However, market participants remain vigilant, keenly observing further developments on the geopolitical front that could influence the trajectory of the equity market in the days ahead.
