Stock selling trimming day-time increases at Pakistani Stock Exchange (PSX)
Stock market seesaws following Tuesday's initial surge in the KSE-100 Index, sparking profit-taking among investors.
The stock market began trading on a bullish note with the KSE-100 soaring nearly 2,800 points, hitting an intra-day high of 120,067.12. But the good times were short-lived, as investors decided to cash in their gains, according to market analysts.
By 2:05pm, the benchmark index was relatively stagnant at 118,548.59, up 1,250.86 points or 1.07%.
In a notable development, Finance Minister Muhammad Aurangzeb revealed in an interview with Reuters that the federal budget for the next fiscal year will be finalized within the next three to four weeks, with scheduled budget talks with the IMF taking place from May 14-23.
The market rebounded strongly on Monday due to a "convergence of positive developments" such as a ceasefire agreement between India and Pakistan, as well as the IMF's approval of crucial funding. The KSE-100 Index saw its highest-ever gain of 10,123 points, closing at 117,297.73.
Meanwhile, India's benchmark indexes opened lower on Tuesday, posting losses after a fragile ceasefire with Pakistan over the weekend. In contrast, small-caps and mid-caps showed signs of growth.
Global investor sentiment remains upbeat after the US and China agreed to temporarily reduce tariffs and collaborate to prevent a global economic meltdown. The sentiment impacted MSCI's Asia ex Japan index, causing it to rise 0.3% on Monday, following a 2% boom in the previous session due to optimism about trade relations.
Although the exact reasoning behind the profit-taking remains unclear, it could be attributed to factors such as geopolitical tensions, global market trends, economic indicators, and institutional interest. Investors may be capitalizing on gains due to improved geopolitical developments, shifts in global markets, favorable economic data, or a decline in institutional interest. However, additional research is needed to confirm these assumptions.
The bullish momentum in the stock market on Tuesday, following the surge in the KSE-100 Index, might have been driven by investors seeking to capitalize on gains, given the improved geopolitical developments between India and Pakistan. Profit-taking could also be influenced by shifts in global markets, favorable economic indicators, or a decline in institutional interest. The federal budget for the next fiscal year, to be finalized within the next three to four weeks, could impact future trading and investing decisions in the business sector, particularly in relation to stocks and the stock-market. In a possible sign of resilience, small-caps and mid-caps showed signs of growth in the Indian market, despite a lower opening for the benchmark indexes, highlighting the complex interplay of factors shaping the stock market's trajectory.
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