The Pakistan Stock Exchange (PSX) was dominated by bears on Tuesday, which caused its benchmark index to drop precipitously by more than 700 points during intraday trading.
The KSE-100 index fell by 953.60 points, or 1.45%, at approximately 1:38, closing at 64,801.70 as opposed to the prior close of 65,755.30. The lowest it had been was 64,64.66.
Despite flirting with the 66,000 mark and remaining positive throughout the day, the index closed lower yesterday. Analysts attributed this to worries about expected difficult negotiations with the International Monetary Fund (IMF) regarding the new Extended Fund Facility and the uncertainty surrounding the direction of monetary policy in the upcoming review on March 18.
The drop was ascribed by Awais Ashraf, director of research at Akseer Research, to investors’ apprehension over the IMF negotiations, which are set to begin this week and would be overseen by recently appointed Finance Minister Muhammad Aurangzeb, “who has described this year as a tough financial period.”
Furthermore, he stated that “the Sensitive Price Index (SPI) data indicates that the onset of Ramadan has intensified inflationary pressure, reducing the probability of a rate cut in the upcoming monetary policy.”
According to Next Capital Limited’s director of research Shahab Farooq, the stock market “witnessed profit-taking today with reducing expectations of a rate cut by MPC next week.”
He also mentioned that “meetings with the IMF staff are scheduled to begin soon, and it is possible that tough actions demanded by the IMF for a new loan facility will be discussed.”
