Shares at the Pakistan Stock Exchange (PSX) witnessed a substantial decline on Monday, with the benchmark KSE-100 index losing over 700 points. Analysts have attributed this sell-off to political uncertainty, along with other economic factors.
At the close of trading, the KSE-100 index stood at 47,447.95 points, a decrease of 770.54 points or 1.6% from the previous closing of 48,218.49 points.
Raza Jafri, Head of Equity at Intermarket Securities, expressed concerns about the economy’s vulnerability, despite some improvements in recent months.
The State Bank of Pakistan recently reported that the country’s current account deficit (CAD) had decreased by 36% to $809 million in July FY24, compared to $1.261 billion in the same month of the previous fiscal year. However, July marked the first deficit in four months of surpluses.
Head of Research at Aba Ali Habib Securities, Salman Naqvi, attributed today’s losses to political uncertainty and the deteriorating law and order situation in the country. He also mentioned that the Oil and Gas Development Company (OGDC) had not received any formal communication from authorities regarding the settlement of the circular debt. While Naqvi acknowledged that the debt settlement was anticipated, the uncertainty surrounding the matter contributed to the market’s unease.
Siddique Dalal, CEO of Dalal Securities, echoed concerns over political uncertainty and the current account deficit. He believed that these factors had caused a shrink in market confidence. Dalal expressed hope for positive news in the future to restore market sentiment.
In conclusion, the decline in PSX shares is largely attributed to political uncertainty and various economic challenges. The market is eagerly awaiting positive developments to restore confidence among investors.