Selling returned to the Pakistan Stock Exchange on Friday after days of buying momentum, as investors moved to book profits following the recent rally.
The benchmark KSE-100 Index shed over 2,200 points during the opening minutes of trading. The scale of the early fall showed how quickly sentiment had turned after the buying of the previous days.
At 9:40am, the index was hovering at 173,146.07, down 2,233.79 points or 1.27 percent. That reading, taken in the morning, captures the position of the market after the opening decline, with the index down by more than two thousand points.
Dunya News later reported the index down 2,024.81 points, or 1.15 percent, at 173,355.05, after touching an intraday high of 174,329.76 and a low of 172,809.89. The later figure shows the index recovering some ground from its low, while remaining down by more than two thousand points on the day.
The downturn followed Thursday’s strong rally, when the KSE-100 surged 3,366.38 points, or 1.96 percent, to close at 175,379.87. Thursday’s close was the highest point of that day’s trading, and it followed a session in which the index had risen sharply.
On Thursday, the index had touched an intraday high of 176,604.52. The previous close before Thursday’s rally was 172,013.48, and the rise to 175,379.87 represented a gain of 3,366.38 points over that previous close.
Traded volume on Thursday was 999.812 million shares worth Rs46 billion, up from 841.615 million shares in the previous session. The rise in volume, alongside the rise in the index, shows that Thursday’s rally was accompanied by heavier trading.
Ismail Iqbal Securities expected investors to take profits following the recent market rally. That expectation, reported before the Friday session, pointed to profit-taking as the likely outcome after the gains of the preceding days.
The Friday decline, as reported in the morning, is consistent with that expectation. After days of buying momentum and a sharp rise on Thursday, investors moved to sell and to realise the gains made in the rally.
No final Friday close should be presented here, because the session was still under way when these reports were published. The figures given are for early trade and for the morning, and they do not represent the close of the day’s trading.
The intraday high of 174,329.76 and the low of 172,809.89 reported by Dunya News show the range within which the index moved during the part of the session covered. The high and the low, taken together, describe a session in which the index moved by more than fifteen hundred points between its peak and its trough.
The fall of 2,233.79 points at 9:40am, equal to 1.27 percent, and the later fall of 2,024.81 points, equal to 1.15 percent, both describe the same morning decline from slightly different points in the session. The difference between the two readings reflects movement in the index during the morning.
Thursday’s rally provides the context for Friday’s fall. The surge of 3,366.38 points, or 1.96 percent, to 175,379.87, from a previous close of 172,013.48, was a strong day for the market, and it set the stage for profit-taking on Friday.
The volume figures add further context. The 999.812 million shares traded on Thursday, worth Rs46 billion, were up from 841.615 million shares in the previous session, indicating that the rally was supported by increased activity.
The expectation from Ismail Iqbal Securities that investors would take profits after the rally was borne out by the early trading on Friday. The selling that returned to the market in the opening minutes was the realisation of that expectation.
The KSE-100, as the benchmark index, is the measure used to track the overall direction of the market. Its fall of more than 2,200 points in early trade on Friday, after its rise of more than 3,300 points on Thursday, describes a market that rose sharply and then pulled back as investors booked profits.
Source: Business Recorder, Dunya News
