The Pakistan Stock Exchange (PSX) showed strong signs of recovery on Thursday after two consecutive sessions of intense selling. The benchmark KSE-100 Index rebounded by 1,279.37 points, or 1.06%, hitting an intraday high of 121,745.30. The lowest point of the session was 121,103.35, still reflecting a solid gain of 637.42 points, or 0.53%, compared to the previous close.
The rally comes as investor sentiment stabilised, with buyers returning to the market after Wednesday’s steep plunge triggered by rising geopolitical concerns. Confidence appears to have returned as traders looked beyond short-term volatility and focused on attractive valuations across several sectors.
According to market analysts, the recovery was driven by institutional buying, primarily in banking, cement, and energy stocks. “It was a technical rebound. Yesterday’s sell-off created buying opportunities, and investors rushed in to accumulate shares,” said a senior analyst at a Karachi-based brokerage house.
Wednesday’s Drop Triggered by Geopolitical Fears
Thursday’s rebound followed a bruising session a day earlier, when the KSE-100 Index dropped 1,505.11 points, or 1.23%, closing at 120,465.93. The plunge came amid escalating tensions in the Middle East, particularly between Iran and Israel, which unnerved investors and led to widespread panic selling across the board.
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During Wednesday’s volatile trading session, the index had reached a high of 121,905.5 points before slipping to a low of 120,418 points. The abrupt downturn wiped out market gains recorded earlier in the week, with market capitalization declining sharply in just a few hours.
The sell-off also saw significant profit-taking in key sectors, especially those exposed to global commodity markets and foreign exchange risks. Brokerage reports noted a sharp decline in foreign investor activity, which further added to downward pressure.
Outlook Remains Cautiously Optimistic
Despite the recent volatility, market participants remain cautiously optimistic about the short-to-medium-term outlook. Analysts believe the market correction was necessary and that Thursday’s bounceback indicates underlying market resilience.
“The PSX is still fundamentally strong, and valuations remain attractive,” said an equity strategist at a local investment bank. “However, geopolitical developments will continue to drive short-term trends, and investors should remain vigilant.”
Traders are also keeping an eye on macroeconomic indicators, such as inflation, interest rates, and any updates on Pakistan’s loan arrangements with international lenders. Positive progress on these fronts could further lift investor co[nfidence in the coming days.
While Thursday’s rally offered some breathing room for investors, market volatility is likely to persist given the uncertain global backdrop. Nonetheless, the swift rebound suggests that local investors still see value in Pakistani equities, especially in blue-chip stocks that remain relatively shielded from external shocks.
The PSX is expected to trade in a narrow range in the near term, with support around the 120,000 level and resistance near 122,500, according to technical analysts.
