Bearish momentum dominated the Pakistan Inventory Alternate (PSX) on Monday as shares declined by greater than 250 factors following the Worldwide Financial Fund (IMF) visit.
Shortly after the opening bell, the benchmark KSE-100 index continued to commerce sideways till 10:30, the KSE-100 then continued a downward trajectory, shedding 416.91 factors, 0.55 per cent, to face at 74,925.43 from the earlier 75,342.34 at 12pm. Lastly, the index closed at 75,084, down by 258.34 factors, or 0.34pc, from the earlier shut.
Yousuf M. Farooq, director of analysis at Chase Securities, mentioned: “The market is down on media stories of a doable electrical energy worth hike together with further taxation measures.”
Nonetheless, in keeping with Farooq, “The market has additionally seen a really giant rally and a few consolidation is regular.
“All eyes at the moment are on the subsequent financial coverage, the funds and phrases and changes for the subsequent IMF programme,” he added.
Awais Ashraf, director of analysis at Akseer Analysis, attributed the bearish momentum to traders being concerned “in regards to the final result of ongoing negotiations between the federal government and the IMF group relating to the brand new programme”.
He additionally mentioned that traders have been apprehensive in regards to the geopolitical environment after the loss of life of the Iranian President Ebrahim Raisi.
Earlier as we speak, it was reported by the Iranian officers and state media that Raisi — a hardliner lengthy seen as a possible successor to Supreme Chief Ayatollah Ali Khamenei — was killed in a helicopter crash in mountainous terrain close to the Azerbaijan border.
An Iranian official mentioned that the helicopter carrying Raisi and Overseas Minister Hossein Amirabdollahian was utterly burned within the crash on Sunday.
Concerning the IMF circumstances, Ashraf highlighted: “Key issues embrace the IMF’s calls for for vital tax income will increase, spending cuts, market-based alternate charge dedication, and a good financial coverage.”
Shahab Farooq, director of analysis at Subsequent Capital Restricted, echoed the identical sentiments. He mentioned, “The market is witnessing some profit-taking as we speak after gaining greater than 2,700 factors in the course of the previous seven classes.”
Moreover, he mentioned that there have been issues associated to the Pakistan-IMF talks for a “bigger and longer programme”, which can consequence the upcoming funds to have “inflationary taxation measures”, impacting “the outlook of graduation of rate of interest minimize”.