In Karachi, the Pakistan Stock Exchange (PSX) experienced a significantdecline on Thursday, with the benchmark index plummeting over 1700 pointsor 3.83%. This drop was fueled by weak investor confidence stemming fromthe prevailing economic uncertainty in the country. As concerns grew aboutthe economy worsening, investors sold off their shares amidst the risingrupee-dollar exchange rate.
From the start of trading, the KSE-100 index took a nosedive and slippedbelow the 45,000 level. The index’s attempt to reach positive territory washindered by the prevailing negative sentiment among investors. At 02:54 pm,the PSX stood at 44,475.06 points, reflecting a 3.83% decrease of 1,769.49points compared to the previous day’s close at 46,244.55 points.
Raza Jafri, the Head of Equity at Intermarket Securities, mentioned thatthe KSE-100 index is facing significant selling pressure due to a lack ofconfidence arising from the weakened economy. Investors are particularlyinfluenced by the depreciating rupee, especially since the next review bythe International Monetary Fund (IMF) is a few months away. The uncertaintyaround planned investment from the Gulf Cooperation Council (GCC) adds tothe hesitation. Jafri added that while value buyers might return with afurther dip, a meaningful valuation reevaluation requires clarity onpolitics and the economy.
Saad Ali, a Capital market expert, echoed similar sentiments, stating thatthe PSX is under pressure due to the consistent decline in the rupee’svalue, which worsens the inflation outlook before the upcoming MonetaryPolicy Committee (MPC) meeting in September. Ali also expressed concernsabout potential public protests over power tariff increases, cautioningthat any populist measures by the interim government could hinder talkswith the IMF.
Read Top Stories
On a positive note, Ali mentioned that the ongoing MSCI rebalancing couldattract foreign inflows, but he believed this wouldn’t be sufficient touplift market sentiment.