Due to mounting fears about the Pakistan economy, investors were nervous during the last trading week and turned to the bears to find encouraging signals. Rise in petroleum product prices by Rs30 per litre, an increase in electricity tariffs by Rs8 per unit and the fall of foreign exchange reserves have all taken a toll on investor confidence. During the past week, T-bill rates rose in the range of 55-75 basis points (bps) in the secondary market, which dampened the interest of investors who feared an increase in the State Bank’s benchmark policy rate. A 55-75 bps increase in T-bill’s auction cut-off rates was reported by an analyst this week, compared to last week. Investors were also wary of making new stock purchases because of May 2022’s high inflation rate of 13.76 percent – a 28-month record. 3.6 percent or 1,547 points were lost by the benchmark KSE-100 index, which finished the week at 41,315. Expectations of the much-anticipated restart of the IMF’s loan programme fuelled a favourable start to the week for the stock market. A further drop in the index was caused by the government’s efforts to open a path for the reinstatement of the IMF’s programme, evident in the decision to raise fuel prices and power tariffs. CPI inflation in May 2022 was 13.8% more year-over-year than expected, sending the stock market plummeting below 43,000 points. After the decision to partially remove the subsidy on petrol and diesel and to raise the price of petroleum by Rs30 per litre was made, the market began trading on a positive note during the week under review on hopes for the restart of IMF loan programme as these measures were considered a prerequisite for the approval of the seventh review by the Fund. Consequently, the Pakistani rupee recovered against the greenback (closed at Rs197.92 this week),” the report stated, adding “however, concerns over inflation (which reached a 28-month high at 13.8 percent in May) and uptick in government securities’ yields in T-bill’s auction dampened the sentiment. More worrisome for investors was an increase in National Savings Scheme interest rates of 150 basis points and an estimated increase in power costs of Rs7.91 per unit on the stock market. In the most recent session of trading, the stock exchange was rocked by panic after Moody’s Investor Service lowered Pakistan’s outlook from stable to negative and the government announced another hike of Rs30 per litre in fuel costs, sparking inflationary fears. Vanaspati and related industries made a favourable impact on the economy as a whole. (One point). Commercial banks, cement, fertiliser, technology and communication, and chemical contributed negatively to the overall score of -363 points (93 points). Pakistan Oilfields (13 points), Abbott Laboratories (10 points), Mari Petroleum (9 points), SCBPL (6 points) and Colgate-Palmolive (four points) were stock-wise positive contributions (6 points). TRG Pakistan (68 points) and Engro Polymer and Chemicals each had negative contributions of 141, 129, 87, and 87 points, respectively, whereas Lucky Cement, HBL, and 87 points (55 points). Exports were down by $0.42 million from the previous week’s net sales of $1.51 million, with the difference accounting for the outgoing week’s decline. Banking ($4.2 million), cement companies ($0.4 million) and other industries saw a significant amount of selling. 210 million shares were exchanged on average each day, with a value of $30 million on a weekly basis (a 25 percent decrease from last week) (down 23 percent week-on-week).