After a steep decline at the open, the Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index recovered most of its losses but remained slightly in the red during the first half of trading on Friday.
The index dropped more than 400 points at the start, hitting an intra-day low of 118,723.28.
At 12pm, the benchmark index was hovering at 119,140.92, a decrease of 12.12 points or 0.01%.
Selling pressure was observed in key sectors including automobile assemblers, commercial banks, oil and gas exploration, OMCs and power generation. Index-heavy stocks, including HUBCO, PSO, SSGC, MARI, OGDC, PPL, POL, UBL, and NBP, are traded in red.
Analysts say investors are actively selling shares amid uncertainty about what the government will announce in the upcoming federal budget.
On Thursday, the PSX closed lower as investors adopted a cautious stance amid uncertainty surrounding the outcome of IMF-driven new taxes in the upcoming budget. The benchmark KSE-100 Index lost 778 points or 0.65%, closing at 119,153 points.
Internationally, Asian shares made some tentative gains on Friday as beaten-down Treasuries found buyers after US President Donald Trump’s tax bill narrowly passed the lower house, although debt worries still lingered.
Overnight, PMI data around the globe showed US business activity picked up pace in May, which helped Wall Street rise earlier in the session before running into selling pressures and closing the day largely flat. In contrast, disappointingly weak activity in Europe dragged shares there lower.
Nasdaq futures and S&P 500 futures both were flat.
The Republican-controlled US House voted by a slim margin to pass Trump’s tax cut bill, which would fulfil many of his campaign pledges, but will increase the $36.2 trillion US debt pile by $3.8 trillion over the next decade.
Treasury yields, especially at the longer-dated end, have climbed on worries about US fiscal health in the run-up to the passage of the bill. That was exacerbated by the decision from Moody’s last week to downgrade the U.S. credit rating, citing rising debt.
The 30-year bonds, however, did manage to find some buyers overnight, with prices now at some attractive levels. Their yields fell another 1 basis point to 5.037% on Friday, having dropped 4 bps to pull away from a 19-month top of 5.161% earlier in the session.
The MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.1% on Friday, but for the week, it is still set for a loss of 0.4% after five weeks of gains.
This is an intra-day update
