Volatile Trading at Pakistan Stock Exchange
On October 9, the Pakistan Stock Exchange (PSX) witnessed a highly volatile trading session, with the benchmark KSE-100 Index fluctuating significantly throughout the day. The market began with a positive outlook, pushing the index to an intra-day high of 166,947.19. However, as the trading session progressed, profit-taking activities led to a decline, causing the index to drop to an intra-day low of 165,109.84.
By the end of the session, the KSE-100 Index closed at 165,266.74, marking a decrease of 907 points or 0.55%. This drop highlighted the uncertainty and caution among investors during the trading period.
Revised GDP Growth Projections
A significant development in the economic landscape came from the World Bank, which revised its GDP growth rate projection for Pakistan downward by 0.5% to 2.6% for the current fiscal year 2025-26. This adjustment was made in response to the ongoing catastrophic floods that have negatively impacted the economy. Additionally, the bank warned of potential inflationary pressures due to disruptions in the food supply chain.
Despite these challenges, Pakistan’s gross domestic product (GDP) growth for FY2025 reached 3.04%, according to estimates released by the Pakistan Bureau of Statistics (PBS) on Wednesday. This figure reflects the country’s resilience amid adverse conditions.
Market Performance on Tuesday
On the previous trading day, Tuesday, the PSX closed in the red, as selling pressure dominated the session. This was attributed to heavy profit-taking by local institutions, which overshadowed any early gains. The benchmark KSE-100 Index experienced a sharp decline, falling by 1,578.66 points or 0.94%, ending the day at 166,173.75 points.
Global Market Trends
Internationally, Asian stocks were influenced by the fallout from political developments in France and Japan. As a result, markets in the region tracked Wall Street lower. Additionally, a prolonged US government shutdown contributed to a surge in gold spot prices, reaching a record level of $4,000 per ounce.
The MSCI’s broadest index of Asia-Pacific shares outside Japan fell by 1%, moving away from the 4-1/2 year high it had previously achieved. Notably, the Chinese and South Korean markets were closed for a long holiday, limiting the scope of market activity.
In Japan, the Nikkei rose by 0.35%, narrowly missing the record peak it had touched in the previous session. This movement drew attention to the Japanese market following a surprise victory for fiscal dove Takaichi over the weekend, raising concerns about the future of fiscal and monetary policy.
Focus on Federal Reserve Policies
Investors are closely monitoring the likelihood of the Federal Reserve implementing its second rate cut of the year during the upcoming policy meeting. Given the uncertainty surrounding the central bank’s decisions, traders are relying on secondary data and remarks from monetary policymakers to gauge the probability of such actions.
Currently, traders are factoring in 45 basis points of easing for the year, indicating a cautious approach to monetary policy in the face of evolving economic conditions.
