The Pakistan Stock Exchange (PSX) witnessed a bearish trend on Monday, with the benchmark KSE-100 index shedding around 200 points amid geopolitical tensions in the Middle East and selling pressure in key sectors.
According to the PSX website, the market opened with a negative sentiment and the benchmark index plunged around 500 points in the early hours of trading. By 12:45 pm, the index dropped the day’s highest 923.59 points, or over 1 %, and lowered to 80,368.54.
Later, the market recovered and ultimately closed at 81,114.20, down by 177.93 points, from the previous close of 81,292.13 points.
Market analysts attributed the bearish sentiment to rising uncertainty following continued Israeli strikes in Lebanon and the assassination of Hezbollah leader Hassan Nasrallah.
The Middle East unrest, coupled with concerns over the US increasing its air support capabilities and putting troops on heightened readiness, played heavily on investors’ minds.
key sectors, including automobile assemblers, cement, chemicals, commercial banks, and oil and gas exploration companies, saw declines.
In the previous week, PSX also closed in the red, with the benchmark index losing 782.32 points on a week-on-week basis. Foreign investors remained net sellers, pulling out $12.443 million from the market.
Despite the approval of the IMF Extended Fund Facility and Pakistan receiving $1.03 billion in Special Drawing Rights (SDR) from the IMF, market performance remained subdued.
Globally, share markets across Asia were also affected by the strife in the Middle East, with the Nikkei dropping 4.6% on concerns about Japan’s new prime minister potentially normalising interest rates. Major stock markets in the Gulf fell as well, with the Saudi index down 0.1% and Dubai’s main index dropping 0.3%.
Finance Minister Muhammad Aurangzeb stated on Sunday that Pakistan’s economy required fundamental reforms, adding that the latest IMF agreement should be the final one. He stressed the need for Pakistan to take decisive action against its cash-based economy as part of the broader reform agenda.
