Pakistan Stock Exchange (PSX) had big change after it dropped more than 1,450 points. At the beginning of trading on Tuesday. This happened because news came out that International Monetary Fund (IMF) didn’t agree with the government’s plan. To handle circular debt. But then, the PSX turned around dramatically.
During the initial trading hours, the KSE-100 experienced a significant drop, falling below 60,000 points to reach an intra-day low of 59,613.17, marking a decline of over 1,450 points. However, it then started to recover. By the end of trading, the benchmark index settled at 61,226.93, showing an increase of 161.61 points or 0.26%. Despite this recovery, index-heavy energy stocks such as OGDC, PPL, PSO, and SNGP remained in negative territory.
Negative sentiments following remarks from the IMF regarding the Pakistani government’s plans for tariff rationalization and circular debt management influenced the downturn in the market. The IMF emphasized the importance of reforming the energy sector to ensure Pakistan’s economic recovery and fiscal stability. However, it expressed doubts about the effectiveness of the proposed plans, particularly concerning circular debt neutrality and the potential burden on vulnerable households.
Market experts had anticipated substantial dividends due to these developments. Concerns surrounding OGDC and PPL, as well as ongoing political uncertainty regarding the formation of a coalition government, exacerbated the downward trend in the market. Despite the absence of positive economic developments, strong corporate performance served as a supporting factor for the market.
For instance, Allied Bank Limited reported significant profit growth in 2023 compared to the previous year. Furthermore, hopefulness about the imminent formation of a coalition government was harbored by market participants, contributing to the market’s recovery.
On Monday, the market had experienced a significant decline, with the KSE-100 closing at its lowest point since December 27, 2023, primarily due to political uncertainty following the general elections. However, on Tuesday, the Pakistani rupee marginally increased against the US dollar in the inter-bank market.
Trading volume on the all-share index saw an increase, with the value of shares also rising compared to the previous session. Notably, K-Electric Ltd emerged as the volume leader in trading, followed by WorldCall Telecom and Pak Refinery. Among the 355 companies traded, 188 recorded an increase, 139 saw a decline, while 28 remained unchanged.
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