The recent sharp decline in the Pakistan stock market, following its historic highs, has raised concerns about the volatile nature of the market. This pattern, where large capitalists withdraw capital at extreme highs, causing a sudden crash, has been observed for a considerable period. This has led to a growing perception that the stock market operates on an artificial basis, seemingly disconnected from the overall economic situation of the country.
Over the past few weeks, the stock exchange experienced a record boom, reaching a high of 67,000 points. However, this trend abruptly reversed as investors chose to sell on Monday and Tuesday, plunging the market into a deep bear market. The market lost a staggering 3 trillion 62 billion rupees, reducing the total capital from 94 trillion rupees to 90 trillion rupees. The SE 100 index fell by 2372 points, failing to maintain the 63 thousand points mark.
Economists attribute this downturn to various factors, including fears of a weak government post-elections, increasing tension in political parties, the current account deficit, and the exclusion of Pakistan Steel Mill from the privatisation list. Analysts have predicted a negative impact on share prices in the Pakistan Stock Exchange, leading to profit-taking by investors.
During trading, index-heavy sectors such as automobile assemblers, cement, chemicals, commercial banks, oil and gas exploration companies, OMC pharmaceuticals, and refineries witnessed significant selling. After a decline of more than 900 points in the 100 index, investors had to resort to profit-taking strategies.
The stock market’s fluctuations persist, and while some experts foresee chances of improvement in the coming days, the overall sentiment remains uncertain.
AMIN WASTOO
HOSHAB
Market turmoil
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