Daily Times

Following on from Fitch Ratings’ downgrading of Pakistan’s outlook, the benchmark KSE-100 Index closed Tuesday’s trading session 978 points lower on the PSX due to investors’ concerns over political uncertainty. A second consecutive day of rupee depreciation versus the dollar also contributed to the market’s slump.

The KSE-100 Index reportedly started the day at 41,367.11 points after an opening gain of 176 points. However, the bears gained control of the market, and it immediately began falling. The index reached a low of 40,313.78 points at approximately 3:25 pm, representing a drop of 1,053.33 points, or 2.55pc.

The benchmark index finished the day at 40,389.07 points, after a drop of 978.04 points or 2.36pc. As a result of the Punjab by-elections, political uncertainty has returned to the benchmark KSE-100 Index, which saw a loss of almost 700 points on Monday. Due to Pakistan’s rapidly deteriorating external financial position and financing conditions, Fitch Ratings also cut Pakistan’s outlook from stable to negative on Tuesday.

With an uncertain economic and political context, Fitch viewed the IMF program’s implementation and Pakistan’s future access to financing following its expiration in June 2023 as extremely risky. Despite Moody’s decision to downgrade the country’s outlook to negative from stable last month, the country’s sovereign credit rating has not been affected, according to the International Monetary Fund, which issued a statement on Monday.

However, Moody’s announcement came at a time when discussions with the IMF were still taking place. The International Monetary Fund and Pakistan’s government did achieve a staff-level agreement last week. Banking (235.12 points), oil and gas exploration (139.97 points), and the fertilizer sector (139.97 points) were the sectors that dragged down the benchmark index (131.05 points). On the all-share index, volume rose from 151.35m on Monday to 194.87m on Tuesday, an increase of 0.6pc. Also, the value of shares traded rose to Rs5.78b from Rs4.36b the previous day. It was K-Electric Limited, followed by WorldCall Telecom, and Cnergyico PK with a total of 19.62m shares each. Traded shares of 339 businesses had 46 rises and 285 falls on Tuesday, with 8 remaining constants.