Daily Times

Anxiety seized the Pakistan Stock Exchange (PSX) on Monday as the benchmark KSE-100 index dropped below the 43,000-point barrier, amid fears of a widening external deficit due to the government’s decision to maintain oil prices at their current level. The government ruled out an immediate increase in the pricing of petroleum products on Sunday, despite the market predicting a rise of up to Rs86 a litre if fuel and energy subsidies are eliminated.

While the government continues to provide subsidies, market sentiment has deteriorated due to the fear that the external deficit would expand. The session began with a precipitous decline, and a lack of investor interest caused the KSE-100 to plunge nearly 1,000 points in the opening minutes. At this time, value-seeking market investors assisted in a modest recovery. However, political instability and concerns over the suspension of the International Monetary Fund (IMF) programme sparked a selling frenzy in the final hour, causing the market to close at its lowest level since March 2021. The KSE-100 closed Monday with a loss of 819.14 points, or 1.88 percent, to finish at 42,667.32 points.

Fears of an unmanageable external deficit fueled a sell-off in the stock market due to oil prices remaining unchanged. The downturn was also exacerbated by the persistence of political and economic uncertainty. In addition, he said, the lack of IMF-related developments has sparked widespread market panic.

Because stock prices had fallen and firms were paying dividends in the double digits, the equity market had become attractive. In a report, Capital Stake stated the PSX indexes “declined steadily throughout the day while volume increased from the previous close. According to observers, the government’s tardiness in addressing the worsening economic crisis encouraged investors to fear and resort to selling.” The government decided over the weekend to maintain petrol prices at Rs149.86 for the next two weeks.

The government will cover the Rs47.02 per litre price gap. The breakdown of gasoline prices revealed that the base price rose by Rs17.42 to Rs184.37. Retailer and freight costs remained unchanged at Rs12.51, and taxation was unaffected. On the economic front, the rupee maintained its downward trend and fell by Rs1.65 versus the dollar on Monday, closing at a record low of Rs194.18. Banking (-175.31 points), cement (127.24 points), and technology and communication (-127.24 points) were the sectors that drove the benchmark KSE-100 index lower (111.24 points)

Volume on the all-share index increased from 208.11 million on Friday to 250.45 million on Monday. The value of traded shares increased to Rs8.91 billion from Rs6.97 billion in the previous session. Lotte Chemical has the most shares outstanding with 18,14 million, followed by Pak Refinery with 18,07 million and Cnergyico PK with 14,17 million. On Monday, 340 firms’ shares were traded; 63 exhibited a growth, 263 a decrease, and 14 remained steady.