The Pakistan Stock Exchange’s (PSX) record-breaking rally paused on Thursday as investors engaged in widespread profit-taking, triggering a sharp market correction. The benchmark KSE-100 Index witnessed significant volatility, climbing to an intraday high of 151,249.62 points before retreating sharply to a low of 148,272.57—a swing of over 2,300 points. The decline ended the index’s bullish run that had seen it close above the historic 150,000-point level for the first time just a day earlier.
Market analysts attributed the sell-off to natural market forces following an extended period of gains. Ahfaz Mustafa, CEO of Ismail Iqbal Securities, stated, “The market is experiencing some profit taking at the end of an incredible rally. The result season is almost at an end and the much needed correction is happening.” This indicates that with most corporate financial results announced, a primary driver for the rally has subsided, prompting investors to secure their profits.
The day’s market movement contrasted with other positive economic indicators. The government successfully raised Rs492 billion through a market treasury bill auction, surpassing its target of Rs450 billion. Notably, the cut-off yields remained largely steady, with the rates for three-month and six-month T-bills holding firm at approximately 10.85%.
Further economic data provided a mixed backdrop. The State Bank of Pakistan reported a current account deficit of $254 million for July, which, while a shift from the previous month’s surplus, represents a 27% improvement from the deficit recorded in July of the previous year. Additionally, the central bank’s foreign exchange reserves were reported at a stable $14.24 billion as of August 8, underpinning the country’s external sector stability.
