KSE-100 Witnesses Nearly 4% Decline Amid Ongoing Correction

In a anticipated correction that unfolded on Tuesday, the Pakistan Stock Exchange (PSX) experienced a substantial decline, with the benchmark KSE-100 losing nearly 4% during the trading session. The day concluded with the benchmark index settling at 62,833.03, marking a noteworthy decrease of 2,371.64 points or 3.64%. At its lowest point, the index hit 62,360.78 during the day.

A widespread sell-off was observed, affecting key sectors such as automobile assemblers, cement, chemicals, commercial banks, oil and gas exploration companies, OMCs, pharmaceuticals, and refinery, all showing significant losses.

This correction follows Monday's profit-taking trend, where the benchmark KSE-100 Index had already lost over 900 points, settling near the 65,000 level. The recent dip comes on the heels of a bullish streak that had propelled the index beyond 66,000.

Market analysts highlight that the correction was expected, and investor attention is now focused on the upcoming International Monetary Fund (IMF) Executive Board meeting. Scheduled for January 11, 2024, the meeting will consider the first review under Pakistan's current $3 billion stand-by arrangement (SBA).

The ongoing IMF program, set to conclude in the second week of April 2024, with approximately $1.8 billion yet to be disbursed, initially released $1.2 billion as the first tranche in July.

Despite a substantial bullish run this year, witnessing a nearly 60% gain, the market sentiment has been affected by an increase in global oil prices, contributing to the recent volatility. The rise in oil prices is attributed to attacks by Yemen's Iran-aligned Houthi militants on ships in the Red Sea, disrupting maritime trade and prompting companies to reroute vessels.

The surge in oil prices poses challenges for Pakistan, a net importer of crude, already grappling with high inflation and escalating energy costs.

Sectors contributing to the decline in the benchmark index include banking (-443.16 points), oil and gas exploration (-301.54 points), and fertilizer (-228.79 points).

The trading session saw a decrease in volume on the all-share index, dropping to 1.51 billion from the previous session's 1.89 billion, while the value of shares increased to Rs29.1 billion from Rs24.6 billion.

Notable volume leaders included K-Electric Limited with 341.06 million shares, followed by WorldCall Telecom with 176.03 million shares, and Cnergyico PK at 131.72 million shares.