Rollercoaster ride continues at PSX, SECP cleaning likely to smoothen the ride

KARACHI: After shedding nearly 1,000 points on Monday the Pakistan Stock Exchange (PSX) benchmark index continued the slide on Tuesday; it opened in red and fell like the London Bridge.

Rollercoaster ride continues at PSX, SECP cleaning likely to smoothen the ride

Rollercoaster ride continues at PSX, SECP cleaning likely to smoothen the ride

For the first half hour of trading, the benchmark 100-index was down more than 600 points trading well below 48,500 points, and when the speculators panicked, investors emerged taking the index in green. All this happened in the first hour of trading. By 11:35AM the market was back in green up 150+ points, but a little before 1PM the market had shed its gains and dipped back into the red, down approximately 140 point at 48,830.

The market is reacting to show-cause notices served to over twenty brokers by the Security and Exchange Commission of Pakistan (SECP) in order to curb speculation.

MD PSX called upon the regulators suggesting a bubble is in the making and the regulator should address it. Timely action would contain “irrational exuberance” and smoothen the market’s future course.

There is some good news as well, foreigners were net buyers yesterday so the US President Donald Trump’s measures might have a positive reaction on the PSX, as fundamentals are strong and “May rally” after PSX inclusion in the MSCI-EM is also due.

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