PSX ends four-day bull run as AI regulation fears rattle global markets
KARACHI (Staff Report): The Pakistan Stock Exchange (PSX) snapped its four-day winning streak on Friday as concerns over potential regulatory restrictions on artificial intelligence (AI) stocks in the United States triggered a sell-off in global equity markets, dragging local shares lower.
The benchmark KSE-100 Index shed 1,493 points, or around 0.85%, to close at 173,887 points, reversing the bullish momentum witnessed over the previous four trading sessions.
Market sentiment remained under pressure amid concerns that the Democratic Party in the United States could push for stricter regulations on AI-related stocks, raising uncertainty over the future growth prospects and valuations of major technology companies.
The benchmark index touched an intraday high of 174,369 points before falling to a low of 172,810 points, reflecting considerable volatility during the trading session.
The sell-off wiped out approximately Rs203.95 billion in investors’ wealth in a single session, while the market’s total capitalization declined by around Rs204 billion to Rs18.909 trillion.
Trading activity, however, witnessed a substantial increase, with total volume surging to approximately 1.48 billion shares against 842 million shares in the previous session. Shares worth Rs22.57 billion changed hands during the day.
The unusual increase in trading volume was largely attributed to heightened activity in penny stocks, indicating that the surge in turnover did not necessarily reflect broad-based investor confidence.
Of the 567 companies traded, share prices of 277 declined, 190 advanced, while the remaining closed unchanged.
Financial analyst Sheheryar Butt said the correction reflected the impact of uncertainty in international markets, particularly concerns surrounding the technology and artificial intelligence sectors in the United States.
He said developments in the US equity market had influenced investor sentiment globally, with Pakistani investors also opting for profit-taking following four consecutive sessions of gains.
Butt said the sharp increase in trading volume needed to be viewed in the context of speculative activity in lower-priced stocks, rather than being interpreted as a sign of strong institutional participation.
He added that investors would remain watchful of developments in international markets, particularly the direction of US technology stocks and the potential implications of regulatory changes for the global investment environment.
The session highlighted the vulnerability of local market sentiment to international developments, despite the recent recovery in the benchmark index.