The Pakistan Stock Exchange (PSX) opened the week with volatility but the benchmark KSE-100 index recovered in intraday trading and posted an increase of over 500 points.
As per data on the PSX website, the market opened with a dip of over 600 points, continuing the previous week’s downward trend. But, stocks showed resilience later during the intraday trading and the KSE-100 index closed at 60,459.74 level, up by 586.78 points or 0.98%.
As the the country faces political instability, and the formation of a coalition government is underway, the uncertainty in political affairs is adversely affecting the equity market.
As per market analysts, investors might find opportunities in the market’s current dips to develop their long-term investment strategies. However, the prevailing bearish trend in the PSX may not align with the strategies of short-term investors.
“Investors are cautious over ongoing political anxiety post general elections where the KSE-100 Index has lost 4,395 points (down 7%) since the elections. We think confidence would regain once government would be formed in the center led by PMLN-led coalition”, said Intermarket Securities Limited.
Additionally, Fitch Ratings said that the close outcome of Pakistan’s election and resulting near-term political uncertainty may complicate the country’s efforts to secure a financing agreement with the IMF.
“A new deal is key to the country’s credit profile, and we assume one will be achieved within a few months, but an extended negotiation or failure to secure it would increase external liquidity stress and raise the probability of default.”
Pakistan’s sovereign dollar bonds also experienced a decline of up to 1.25 cents on Monday, amid inconclusive polls and political uncertainty.
