The stock market witnessed a volatile session on Wednesday, with investor sentiment swinging amid recent economic developments and boosted by profit-taking in former top-performing stocks.
The KSE-100 index of the Pakistan Stock Exchange (PSX) rose 1,376.02 points or 1.2 percent to an intraday high of 116,236.7 in early trade. However, profit-taking picked up momentum later, taking the index to an intraday low of 112,460.89, down 2,399.79 points, or -2.09%.
Analysts attributed the session’s volatility to profit-taking in high-performing stocks and stock-specific developments.
“Broadly speaking, the pattern of profit-taking is reflected in some of the names that have gained the most recently,” said Muhammad Saad Ali, director of research at Intermarket Securities Ltd.
Market activity comes against a backdrop of improving macroeconomic fundamentals.
Pakistan’s current account posted its largest monthly surplus in nearly a decade, recording a surplus of $729 million in November 2024. This is the fourth consecutive month of surplus and represents the highest monthly figure since February 2015, a significant turnaround from the $148 million deficit in November. 2023.
For the first five months of fiscal year 2025, the current account surplus is $944 million, compared to a deficit of $1.67 billion during the same period last year. The improvement is due to a 14% month-on-month decline in the trade deficit, a 43% decline in the services deficit and a decline in interest and dividend returns.
Prime Minister Shehbaz Sharif hailed the record current account surplus, calling it “highly encouraging for the national economy”. He said that this success will strengthen the international economic position of Pakistan and further increase the confidence of investors.
Net foreign direct investment (FDI) rose 31 percent year-on-year to $1.124 billion during the first five months of fiscal 2025, with November contributing $219 million, up from the same period last year. 27% more than The main contributors to FDI were China, Hong Kong and the UK, with significant investments in the power and financial sectors.
Remittance inflows also picked up, rising 29 percent year-on-year to $2.9 billion in November and totaling $14.8 billion in the first five months of fiscal 2025. Government incentives to promote formal banking channels and stable foreign exchange reserves, amounting to $16.6 billion — of which the State Bank of Pakistan (SBP) has $12.051 billion.
The State Bank recently cut the policy rate by 200 basis points, bringing it to 13 percent. The aggressive monetary easing is aimed at stimulating economic activity amid falling inflation, which hit 4.9 percent in November, the lowest level since April 2018.
During a briefing, State Bank Governor Jameel Ahmed expressed optimism about achieving sustainable economic stability, with foreign reserves expected to exceed $13 billion by the end of fiscal year 2025.
Tuesday’s session was marked by volatility, with the KSE-100 index crossing the 117,000-point mark to touch an intraday high of 117,039.17 before profit-taking took it to a low of 113,688.54.
The index closed down 1,308.73 points (1.13%) at 114,860.68, as traders booked profits after the recent record-breaking session.