Pakistan Stock Exchange was recently ranked as the 5th best performing stock market by Bloomberg, followed by the inclusion in the emerging market index by MSCI, last year. However, the first day of trading in the emerging market did not go in accordance with the expectations, as PSX lost more than 1,800 points at the end of Thursday’s session.
It was the biggest decrease in the history of stock market in terms of points, as the PSX lost 2,230 points before making a little recovery to close at 48,780.81. The market was down by 3.58% at the end of the day, a result that no one would have expected on the first day as an emerging market. Massive foreign selling of $82 million was the biggest cash outflow from the market since July 2013.
The decrease in market also raised concerns over the economy of the country as it was thought that the entry into emerging market will be bringing in large amounts of money in the country. No one had thought that there will be massive outflows as investors and brokers had been expecting inflows of $200-500 million.
The bearish trend of the market also resulted in several stocks hitting the lower lock in order to avoid posting further losses. In the Pakistan Stock Exchange, a stock hits lower lock when it is down by 5%. Rafhan Maize and Wyeth Pak Ltd were the stocks that decreased the most by Rs.108.33 and Rs.95.07, respectively.
Rafhan Maize was down by 1.48%, Wyeth Paki by 4.12%, and Pak Tobacco decreased by 5%. Shahtaj Sugar gained 3.02% while Sazgar Eng and Wah Noble also increased by 2.72% and 2.87%. During yesterday’s trading session, stocks of 388 companies were traded, out of which value of 343 stocks decreased, 38 saw an increase in their value, while seven remain unchanged.