KSE-100 falls over 800 points as PSX selling pressure builds

Stocks at the Pakistan Stock Exchange came under sustained selling pressure on Thursday, with early gains gradually erased through the morning session and the benchmark KSE-100 Index shedding more than 800 points. At 1:11pm the index was at 169,106.82, down 862.50 points, or 0.51%. The retreat was broad enough to matter for local investors: it follows a run of gains and points to fragile sentiment rather than a single sector's weakness.

Selling was observed in key sectors including automobile assemblers, cement, commercial banks, oil and gas exploration companies and oil marketing companies. Index-heavy stocks traded in the red, among them DGKC, HBL, MCB, UBL, NBP, MARI, OGDC, PPL and PSO. Because these counters carry large weights, their decline moved the benchmark index more than the underlying breadth of selling would suggest.

The move comes a day after the exchange recovered ground. On Wednesday, selective buying in commercial banks, cement and fertiliser stocks lifted the KSE-100 Index by 368.92 points, or 0.22%, to 169,969.33. Separately, the Federal Board of Revenue extended on Wednesday the deadline for filing income tax returns, moving it from 30 September to 15 October.

Globally, Asian stocks were subdued on Thursday and global bonds remained under pressure after a difficult September. Investors were weighing a slower-than-expected rise in US inflation in August, which reduces the probability of a rate increase later this month, according to the source material. Blockbuster earnings from artificial intelligence chipmaker Micron failed to lift the mood in Asia, while stalling peace talks between the US and Iran over the seven-month war in the Middle East kept oil prices elevated. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2%, with South Korea's KOSPI easing 0.14%, though Japan's Nikkei was up over 1% on gains in chip-related shares.

US inflation data published on Wednesday showed prices rose less than expected in August, and pressures in the prior month were more moderate than previously reported. Traders reined in wagers on a Federal Reserve rate increase, with CME's FedWatch tool showing a 38% chance of a hike this month, against 50% a day earlier. The Fed raised rates in September for the first time in three years and flagged further increases in borrowing costs in the months ahead.