Bloodbath at PSX as political agitation claims over 38,00 points
1. KSE-100 Index fluctuates amid political tensions, recording a high of 99,819.59 and a low of 94,180.59
Stocks experienced significant volatility on Tuesday as Pakistan Tehreek-e-Insaf's (PTI) "do-or-die" protest march in Islamabad turned violent, driving jittery investors to the sidelines. The day’s trading reflected the growing political turmoil, as escalating protests clashed with market resilience.
The session opened with turbulence, spurred by fears over the impact of the protests, which saw thousands of PTI supporters pushing through government barricades to press their political and constitutional demands.
Early losses highlighted concerns that the protests could disrupt economic stability, though some of the losses were recovered later as the market stabilized. The Pakistan Stock Exchange (PSX) benchmark index fluctuated between a high of 99,819.59 and a low of 94,180.59, reflecting the cautious approach of investors. At the open, the index was unable to maintain its gains, retreating below Monday’s close of 98,079.78 points.
The ongoing political unrest, fueled by PTI’s intense protests, continues to overshadow the market. Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, explained the decline, attributing it to political uncertainty, concerns about foreign capital outflows, and weakness in global crude oil prices. He also noted the impact of the PSX futures contracts' rollover and consolidation amid the protests.
PTI supporters, defying barricades and government restrictions, have taken to the streets of Islamabad, demanding the release of political prisoners, the reversal of the 26th Constitutional Amendment, and the restoration of what they claim is their "stolen mandate." These protests have intensified market volatility, prompting investors to adopt a cautious, wait-and-see approach.
On Monday, the market had also seen dramatic swings, reaching an intraday high of 99,317.47 points before closing at 98,079.78 points, up by 281.55 points, or 0.29%. While strong macroeconomic fundamentals and positive corporate earnings offered some support, political instability limited further gains.
Banking, fertilizer, and pharmaceutical stocks led the rally, reflecting investor preference for stable sectors during times of political turmoil. Despite the modest rebound on Monday, the persistent political instability continues to weigh on market sentiment, as investors remain wary of further disruptions to economic stability.
While positive macroeconomic indicators, such as declining yields and an improved current account balance, provide some reassurance, the ongoing protests represent a significant risk to investor confidence.
