Bulls and bears gear up for the next round at the Pakistan Stock Exchange (PSX) as the benchmark KSE-100 Index experienced a dramatic reversal on Tuesday after plunging below 60,000 level by declining over 1,400 points in the opening minutes of trading.
The initial decline was attributed to reports indicating the International Monetary Fund (IMF) was not onboard with the interim government’s circular debt plan and ongoing political uncertainty in the country after the February 8 election.
As per the PSX website, despite hitting an intraday low of 59,613.17, the KSE-100 index closed at 61,226.93, showing an increase of 161.61 points or 0.26% from the previous close of 61,065.31 points.
Market opened the week with a negative note by declining 2253.59 points or 3.58% mainly affected by the clouds of uncertainty hovering over the political horizon.
Topline Securities said on Monday, “Continuing last week’s momentum, Pakistan equities commenced the business on a negative note, remained bearish throughout the sessions and ultimately KSE 100 index called the day at 61,065 levels (lost 1878 points; down 2.98%). The aforesaid selling spree can be attributed to further delay in circular debt management plan where IMF’s nod is awaited and may likely receive in this week as informed by Petroleum Division.”
Therefore, today’s gain of 0.26% is promising for equity investors, as a portion of them are anticipating a post-election rally at the PSX.
“We believe that the market requires clarity on government formation, key portfolios of finance, energy and industries ministries, challenged constituency results and clarity on circular debt plan for stability and investor confidence”, said Shahid Ali Habib, CEO of Arif Habib Limited.
Therefore, the current dips in the PSX directly result from political instability and uncertainty. Investors and market moguls are closely monitoring political developments. Confidence among equity investors may recover once the process of forming a coalition government commences.
