PSX Slips as Investors Take Profits After Historic Rally

The Pakistan Stock Exchange (PSX) witnessed a decline on Thursday as investors opted to secure profits following a historic rally earlier in the week. Market analysts noted that with the corporate result season nearing its end, a long-anticipated correction finally set in.

During the session, the benchmark KSE-100 Index first climbed to an intraday peak of 151,249.62 points, gaining 658.62 points (0.44%). However, the upward momentum quickly reversed, dragging the index down to 148,272.57 points, a steep decline of 2,318.43 points (-1.54%) from its high.

Market experts believe the correction is a healthy sign. “After such a strong rally, some cooling off was expected,” said Ahfaz Mustafa, CEO of Ismail Iqbal Securities. He explained that most of the quarterly earnings have already been announced, leaving investors with fewer triggers to keep the bullish trend alive.

Treasury Bill Auction

In related financial developments, the government successfully raised Rs492 billion through the auction of market treasury bills (MTBs), surpassing its initial target of Rs450 billion. Cut-off yields on one-month and three-month papers held steady at 10.8996% and 10.8502% respectively. Meanwhile, the six-month yield remained almost unchanged at 10.8501%, showing only a minor drop of two basis points.

Current Account Position

The State Bank of Pakistan (SBP) reported that the country recorded a current account deficit of $254 million in July, down 27% compared to the $348 million deficit in the same month last year. The figure comes after a surplus of $335 million in June. As of August 8, Pakistan’s foreign exchange reserves stood at $14.24 billion, providing some cushion to the economy.

Market Context

The correction followed Wednesday’s record-breaking session when the KSE-100 Index surged by 820.26 points (0.55%) to settle at 150,591 points, crossing the 150,000 mark for the first time in history. That day, the index had touched an intraday high of 151,261.67 points before closing slightly lower at 150,591.

Outlook

Analysts suggest that despite Thursday’s sell-off, the market’s medium-term outlook remains positive. However, short-term volatility is likely to persist as investors continue profit-taking after the recent historic surge.