The KSE-100 started the mid-week trading session on a positive note, peaking at an impressive 115,773.39 during intraday trading.
However, as selling pressure mounted in the latter hours, the index shifted to negative territory. By the close, the benchmark index settled at 114,495.71, reflecting a decline of 308.46 points or 0.27%.
Market Sentiment and Consolidation Phase
Market analysts, such as Intermarket Securities, interpret this downturn as part of a consolidation phase. The primary reason cited is the lack of fresh triggers to drive the market upwards.
Investors are now turning their focus toward upcoming events, particularly the Monetary Policy Committee (MPC) meeting.
This meeting is expected to play a pivotal role in determining future market directions, with speculations of another large rate cut or future guidance shaping market expectations.
Investors are also keenly observing global influences, notably the new US administration that takes office next week.
While it’s highly unlikely in the short term, any potential signs of pressure for the release of Imran Khan from jail could significantly impact market sentiment.
These geopolitical events, coupled with US consumer price data, create an air of caution, potentially hindering market momentum.
In the power sector, Hub Power Company Limited (HUBC) stood out as a key player, drawing significant investor interest.
This was after the federal cabinet approved revised agreements with 14 Independent Power Producers (IPPs), fueling optimism in the energy market.
Key gainers like Fauji Fertilizer Company Limited (FFC), Hub Power (HUBC), Bank Alfalah Limited (BAFL), GlaxoSmithKline (GLAXO), and Attock Petroleum (ABOT) collectively contributed 339 points to the index.
Conversely, ENGRO Corporation (ENGROH), Mari Petroleum (MARI), Service Industries (SRVI), United Bank Limited (UBL), and Systems Limited (SYS) experienced losses, which wiped out 514 points from the index, marking the selling pressure that eventually led to the downturn.
Previous Market Trends
The bullish sentiment that persisted on Tuesday was driven by healthy gains from fresh buying, primarily from local investors combined with institutional support.
In the preceding three trading sessions, the KSE-100 had surged by over 2,100 points, reflecting a robust upward trend.
This indicates a volatile but fundamentally strong recovery phase, which investors are watching closely.
On a global scale, major indices showed mixed results on Wednesday. US equity futures saw slight gains, with S&P 500 futures up 0.1% and Nasdaq 100 futures increasing 0.2%.
Meanwhile, Japan’s Nikkei saw 0.1% losses, extending its losing streak to five days. MSCI’s broadest index of Asia-Pacific shares, excluding Japan, experienced a slight dip of 0.1%.
In China, blue chips fell 0.4%, and Hong Kong’s Hang Seng index dropped 0.3%, reflecting global market sentiment that is currently cautious ahead of key economic data releases.
Asia witnessed significant news, including the US Securities and Exchange Commission’s (SEC) lawsuit against Elon Musk. The lawsuit alleges failure to disclose the timely purchase of more than 5% of Twitter’s common stock in 2022, shedding light on regulatory scrutiny in global markets.
Locally, the Pakistani rupee recorded a marginal decline against the US dollar, depreciating 0.02% in the inter-bank market on Wednesday.
The currency settled at 278.77, reflecting ongoing currency volatility amidst external economic pressures.
