The Pakistan Stock Exchange (PSX) endured another tumultuous session on Wednesday, as the benchmark KSE-100 Index faced significant losses.
By 2:35 PM, the index had dropped to 113,632.18, marking a steep decline of 1,410.07 points or 1.23%, as investors grappled with a host of adverse factors.
Index-heavy stocks such as HUBCO, SSGC, SNGP, OGDC, MARI, PPL, ENGRO, MEBL, NBP, and UBL witnessed significant declines, deepening investor concerns.
Political Uncertainty and Market Concerns
Market analysts attribute the downward trajectory to ongoing political instability and apprehensions regarding the policies of the new U.S. administration under President Donald Trump.
Intermarket Securities, in its latest report, noted, “We think politics and market concerns around the new U.S. administration are key factors dragging investor sentiment.”
The brokerage added that the PSX is likely to remain rangebound unless new positive triggers emerge to invigorate confidence.
The downturn on Wednesday followed a volatile session on Tuesday when the KSE-100 Index oscillated in both directions before closing lower by over 800 points, settling at 115,042.25.
This trend underscores the fragile state of investor sentiment and the heightened sensitivity to global and domestic developments.
Global Stock Market Gains
Contrary to the bearish trend at the PSX, global equity markets saw gains on Wednesday. Investor optimism was fueled by robust corporate earnings and a series of new policies announced by U.S. President Donald Trump. Notably:
- Netflix shares surged 14% in after-hours trading, driven by a record addition of subscribers in the last quarter.
- Nasdaq futures climbed 0.5%, while S&P 500 futures advanced 0.2%.
Tech and Infrastructure Investments
Late Tuesday, President Trump unveiled a major initiative involving OpenAI, SoftBank, and Oracle, forming a joint venture named Stargate.
The consortium plans to invest up to $500 billion in artificial intelligence infrastructure, sending ripples through tech stocks worldwide.
- Shares of SoftBank soared 9% in Tokyo.
- Oracle registered a 7% gain overnight, reflecting growing investor confidence in the tech sector’s prospects.
While these developments boosted global sentiment, concerns about tariff policies persisted.
President Trump hinted at imposing a 10% tariff on Chinese goods starting February 1, alongside a renewed threat of levies targeting the European Union.
Major Contributors to the Decline
The automobile industry faced sustained pressure as rising input costs and dwindling consumer demand weighed heavily on profitability.
Companies in this sector have been grappling with declining sales, exacerbated by the broader economic slowdown.
The commercial banking segment also took a hit, with major players like UBL and NBP witnessing sharp declines.
Concerns over shrinking margins and rising non-performing loans continue to plague the sector.
Energy stocks, including OGDC, PPL, and MARI, traded in the red amid fluctuating global oil prices and uncertainty surrounding government policies on energy tariffs and subsidies.
