Karachi, February 6, 2025 – The Pakistan Stock Exchange (PSX) witnessed a significant downturn in midday trading on Thursday, with the benchmark KSE-100 index plummeting by approximately 1,563 points, or 1.4%.
The sharp decline comes amidst growing anticipation of a new tax package targeting property transactions, raising concerns among investors about potential fund diversions.
At 12:30 PM, the KSE-100 index stood at 110,373 points, a considerable drop from the previous closing of 111,935. This slide reflects investor anxiety over the anticipated impact of the proposed tax measures on the real estate sector and its potential ripple effects across the broader market.
Analysts suggest that the impending property tax package has triggered a wave of selling, as investors fear a shift of funds away from the stock market and into the real estate sector. This apprehension has particularly impacted key sectors, including commercial banks, fertilizer, oil and gas exploration companies, and oil marketing companies (OMCs). Index heavyweights such as PSO, SSGC, SNGPL, MARI, POL, PPL, MEBL, and UBL all traded in negative territory, further contributing to the KSE-100’s decline.
“We believe that investors are currently finding market valuations unattractive,” commented Intermarket Securities, highlighting the low dividend yields offered by top stocks. The brokerage house pointed out that the dividend yield on these stocks barely exceeds the yield on comparable government securities by 2 percentage points, making them less appealing to investors seeking higher returns.
Looking ahead, Intermarket Securities anticipates a range-bound market in the near term, emphasizing the importance of the upcoming International Monetary Fund (IMF) talks as a crucial determinant of future market direction. The outcome of these discussions will likely play a significant role in shaping investor sentiment and influencing the trajectory of the KSE-100.
The KSE-100’s downward trend began earlier in the week, with Tuesday’s session witnessing profit-taking that pushed the index down by 810 points to close at 111,935.38. The PSX remained closed on Wednesday for the Kashmir Day holiday, further contributing to the pent-up selling pressure observed in today’s trading session. The KSE-100’s performance today underscores the market’s sensitivity to policy changes and the prevailing uncertainty surrounding the economic outlook.