KSE-100 Index breaches 61,000 ceiling but ends up in red zone amid profit-taking
Business
Market correction has been on the cards after an unprecedented record-shattering surge
KARACHI (Dunya News/Web Desk) – The record-breaking streak continued during early trading on Wednesday, as the KSE-100 Index reached a new high of 61,555.83, just after a day after surpassing the 60,000 mark amid improved macroeconomic indicators, the expected end to rate hikes and the signing memorandums of understanding (MoUs) worth billions of dollars for foreign direct investment (FDI).
However, the benchmark index later in the session witnessed the much-anticipated market correction amid profit-taking and had slipped into red zone, settling at 60,647.03 after shedding 228.27 points, or 0.38 per cent, by the time trading was closed for the day.
The volatility in market meant that the KSE-100 Index vacillated between a high of 61,555.83 and low of 60,328.17 against the previous closing of 60,730.26 during Wednesday’s session.
Meanwhile, the selling pressure meant that the trading volume remained high at over 342 million shares against the total of over 336 million shares registered yesterday.
There are a number of factors contributing to the ongoing surge in stocks but the foreign currency inflow will be the major boost, as the foreign direct investment (FDI) will not only revive the economy by expanding the existing businesses but also creating new ones while providing the much-needed job opportunities to the people who are hit hard by the prevailing cost-of-ling crisis sustained by the record-high inflation.
At the same time, the FDI will enhance the share prices of listed companies especially in energy and related sectors – an eagerly awaited trend already being witnessed in the market after years of undervalued status.
Meanwhile, the decline in property prices – a trend witnessed around the globe – is also making the investors rush towards the stocks due to the higher dividends.
Also, the IMF’s insistence on expanding the tax net and enhance revenue collection mean black market or informal sectors will slowly become less profitable as a result of documentation of economy.
