News Analysis |
On Thursday, Pakistan Stock Exchange (PSE) witnessed a steep decline as the Karachi Stock Exchange plunged by a staggering 1123 points to hit 38,785.
Amid the ongoing turmoil in the country, the uncertainty in the political sphere took its toll on the country’s stock exchange.
All the sectors were in red at the end of trading. Power generation & distribution, and refinery sector observed the highest decline of -4.93%, and -4.82% respectively.
The stock market had been going through a slightly rough phase in recent months especially after the disqualification of the ex-Prime Minister Nawaz Sharif in July.
Over two hundred traded scripts depicted a negative value as companies like Azgard Nine, BYCO Petr. Worldcall Telecom, Fauji cement, Japan Power, TRG Pak., Bank of Punjab and KE lost a fair bit of their value.
The PSE has started on a negative note and declined steadily from its initial position. Though, after 11:00 am, it recovered a bit of its lost value but continued hovering at the same level. However, it started declining and later it nosedived and reached a lower level.
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The Stock Exchange had started on a bearish note and had merely lost 351 points in the early morning session. But, after the emergence of reports regarding the possible protests by the Pakistan Awami Tehreek (PAT) and Pakistan Tehrek-e-Insaf’s (PTI) demand of the resignation after the publication of Justice Baqar Najafi report on the 2014 Model Town incident, which resulted in the killing of 14 people, has sparked an adverse reaction.
Initially, it was believed that this phase would pass with not much damage. But, later on, it dipped further and wreaked havoc.
The stock market had been going through a slightly rough phase in recent months especially after the disqualification of the ex-Prime Minister Nawaz Sharif in July.
On Thursday, Pakistan Stock Exchange (PSE) witnessed a steep decline as the Karachi Stock Exchange plunged by a staggering 1123 points to hit 38,785.
Moreover, the continuous economic turmoil amid falling reserves and increasing twin-deficit and political turmoil has kept investors uninterested. Before Thursday’s trading, the current political climate had trimmed the share values slowly, and sentiments of foreign investors were not confident in the context of government rigidness on not allowing the dollar to depreciate to boost exports.
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Given the current situation, traders seem directionless and it is more likely that institutional investors may decide to wait and watch amid lack of potential buyers in the market. Some professional managers may decide to play a waiting game until this precarious economic and political situation subsides paving way for more stabilized markets for trading.