Stocks suffer bloodbath as PSX plunges nearly 3%

The Pakistan Stock Exchange (PSX) suffered a bloodbath on Monday as the benchmark KSE-100 Index plummeted by nearly 3% mainly due to clouds of uncertainty hovering over the political horizon. 

According to data available on the PSX website, the KSE-100 index started trading on a negative note by declining 670 points in the early hours. By 11:00 am, the index had fallen by 1,289 points or 2.05%.  

As of 2:30 pm, the bearish trend prevailed further and the benchmark index plunged by 2253.59 points or 3.58% to reach the 60,690.15 level.

At day end, the 100-index closed at 61,065.31 points, down by 1878.43 points or 2.98% as compared to the previous close.  

This sharp decline was attributed to the investors’ fears over the political instability in the country following the inconclusive elections on February 8, 2024. No party was able to secure a majority in the parliament, raising the prospects of a hung government or a coalition with weak mandate.

Bloomberg reported increasing investor apprehension, attributing it to the election’s outcome, which hints at a rise in political instability.

Despite government efforts to dispel concerns regarding its circular debt reduction and tariff rationalization plans, the oil & gas exploration companies sector experienced the most significant impact.

Other sectors, including cement, oil & gas marketing companies, power generation & distribution, and fertilizer, also negatively influenced the index.

On a positive note, some companies managed to add points to the index, with COLG, FFC, SRVI, SHFA, and INDU making minor gains.