ISLAMABAD: Just a day following the swearing-in of the cabinet, bears took control of the Pakistan Stock Exchange (PSX) on Tuesday, with the benchmark KSE-100 index plunging around 1,000 points during intraday trading.
The KSE-100 index, a key measure of the market’s performance, dropped to 64,801, marking a significant decline of 953 points or 1.61% from the previous close of 65,755.30.
Analysts attributed the market downturn to the announcement of the Prime Minister Shehbaz Sharif-led cabinet. They highlighted concerns among investors, particularly regarding the allocation of the “most important Q-block” to Aurangzeb.
Muhammad Aurangzeb has been appointed as the Finance Minister, with additional responsibility for the Revenue Division, raising speculation about another minister eventually taking over the finance portfolio.
Investor skepticism regarding the upcoming talks with the International Monetary Fund (IMF), scheduled to commence from March 14.
The previous day, the stock market experienced a slight decline after reaching a high of over 66,100 points earlier in the session. The KSE-100 closed at 65,755.31 points, shedding 38.45 points or 0.06%.
Meanwhile, Ahsan Mehanti from Arif Habib attributed the market pressure to weak global equities and concerns about economic uncertainty, exacerbated by uncertainty over the monetary policy announcement on March 18 and negotiations for new IMF loans.
Another expert highlighted investors’ caution about the IMF talks led by the newly appointed Finance Minister Muhammed Aurangzeb, who has characterized this year as a challenging financial period. Inflationary pressures intensified by the onset of Ramazan, reducing the likelihood of a rate cut in the upcoming monetary policy.
He also emphasized the anticipation of stringent measures demanded by the IMF for a new loan facility, as meetings with IMF staff are set to begin soon.
