PSX sheds 900 points amidst political uncertainty

Stock market closes in green

KARACHI: Bears maintained control over the Pakistan Stock Exchange (PSX) on Tuesday, causing a substantial decline in its benchmark index by over 900 points.

As per PSX records, the KSE-100 index experienced a loss of 931.98 points, settling at 61,841.74, marking a 1.48% decrease from the previous closing figure of 62,773.72 points.

The week commenced with the benchmark index witnessing a significant drop of more than 1,000 points, the most significant single-day decline in over a month. Analysts attributed these losses to profit-taking activities preceding the announcement of the monetary policy.

Today, notable activity was observed in energy stocks such as K-Electric Limited, World Telecom Limited, Hascol Petroleum Limited, Pakistan Telecommunication Company Limited, and Pakistan Refinery Limited.

Talking to Dawn, Shahab Farooq, Director of Research at Next Capital Limited, attributed the bearish trend to political uncertainty leading up to the February 8 general elections. He mentioned that geopolitical concerns and foreign selling were constraining market performance, anticipating continued volatility in the short term.

Yousuf M Farooq, Director of Research at Chase Securities, echoed similar sentiments, citing foreign selling and election uncertainty as ongoing pressures on the PSX.

Commenting on the State Bank of Pakistan (SBP)’s monetary policy statement, Farooq acknowledged some disappointment with the outlook on inflationary pressure, emphasizing expectations of a gradual decline in inflation over the coming months. The SBP had maintained the interest rate at 22% and revised the inflation target to a range of 23 to 25% for the current fiscal year.

Abdul Azeem, Head of Research at Spectrum Securities Limited, noted a substantial contraction in the index, attributing the decline to political uncertainty and sustained foreign selling. He highlighted the special court’s decision to impose a 10-year sentence on Imran Khan and Shah Mahmood Qureshi as factors contributing to investor unease.

Azeem also pointed out that the international oil prices’ increase to $77.02 per barrel and concerns over falling demand had a negative impact on the market.

Awais Ashraf, Director of Research at Akseer Research, emphasized that political uncertainty, the MPC’s decision to maintain the status quo, and foreign selling amid a deteriorating law and order situation collectively contributed to the index’s substantial decline.

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