The Pakistan Stock Exchange (PSX) saw continued bearish momentum on Tuesday, with the benchmark KSE-100 index dropping more than 900 points to stand at 61,841.74, down 1.48 per cent from the previous close. This follows a decline of over 1,000 points on the previous day – the largest single-day fall in over a month. Analysts attributed the losses to profit-taking ahead of the monetary policy announcement and political uncertainty ahead of the February 8 general elections.
Energy stocks like K-Electric Limited, World Telecom Limited, Hascol Petroleum Limited, Pakistan Telecommunication Company Limited, and Pakistan Refinery Limited were particularly active. Director of Research at Next Capital Limited, Shahab Farooq, and Director of Research at Chase Securities, Yousuf M. Farooq, both pointed to political uncertainty and foreign selling as key factors contributing to the market’s decline.
Despite some disappointment with the State Bank of Pakistan’s outlook on inflationary pressure in the monetary policy statement, there is an expectation that inflation will gradually decline over the coming months. The central bank had kept the interest rate unchanged at 22pc and increased the inflation target for the current fiscal year. The ongoing political uncertainty and sustained foreign selling are expected to keep the stock market volatile until there is clarity on the political front. The market also saw a decline due to concerns over international oil prices and a deteriorating law and order situation.