After losing more than 1,500 points during intra-day trading on Monday, the Pakistan Stock Exchange (PSX) experienced huge selling pressure. KSE-100 Index fell 3.23 percent on Monday, the largest percentage drop in 2022, because of uncertainty over IMF inflows, increased internal political noise, and a bearish run on regional stock markets.
The market began to decline shortly after opening at 44,840.81 points, with the benchmark KSE-100 index down 1,543 points, or 3.44 percent, by 1:59 p.m. The benchmark index was down 1,543 points, or 3.44 percent, at 1:59 p.m. According to the PSX Rulebook, if the index moves by more than 5% above or below its previous close and remains in that position for five minutes, trading in all securities was paused for a defined amount of time, usually one hour.
The benchmark index ended the day at 43,393.14, down 1,447.67 points, or 3.23 percent, marking its fifth consecutive loss. For the first time since December 2, 2021, the KSE-100 has fallen by more than 4% in a single day.
Experts suggest that in order to keep things under control, the government must establish a detailed economic strategy, as well as a plan for dealing with growing oil prices and other commodities. With the start of IMF negotiations scheduled for May 18, markets will be keeping a close eye on developments.
Since Pakistan’s choices for avoiding insolvency have been restricted after it could not instantly secure any big financial support from its three friendly countries, the International Monetary Fund (IMF) may begin talks in Doha on May 18.
After May 15, if the government is willing to begin reducing gasoline subsidies, the two sides have provisionally agreed to meet in Qatar for policy level discussions to resurrect the programme and increase its duration and size to $8 billion.
There was only one trading day last week because of Eid-ul-Fitr; the market was closed from Monday to Thursday. However, the stock market stayed in a downward trend during this single trading session.
Monday’s sell-off was sparked by investors’ fears about the stability of the Pakistani rupee, rumours of an interest rate rise in the next monetary policy, and political upheaval in the country. Despite rising worldwide oil costs, the government has been reluctant to raise domestic pricing, which has led to a rise in the price differential claim (PDC) on subsidies. As a result of increased political clamour following Imran Khan’s announcement of a protracted march towards Islamabad on May 20, investors are concerned.
Corporately, Oil and Gas Development Company (OGDC) declared in a notification to PSX that OGDC and Pakistan Oilfields Limited (POL) had been provisionally awarded new exploration blocks by the Directorate General of Petroleum Concessions (DGPC).
Banking (305.05 points), cement (235.04 points), and technology and communication (235.04 points) were the sectors that dragged the benchmark index lower (183.19 points). Some 305.21 million shares were traded on the all-share index, up from 189.48 million on Friday, according to the S&P 500. From Rs5.66 billion to Rs9.24 billion, the value of shares exchanged has risen dramatically. By volume, Lotte Chemical had 27.01 million shares, while Cnergyico PK came in second with 23.86 million shares, followed closely by WorldCall Telecom with 20.98 million shares.
Monday’s trading on the stock market involved 363 different firms, with 38 showing gains, 311 showing losses, and 14 showing no change from the previous day’s activity.