Bears take hold of PSX as shares plunge over 900 points on ‘delay in budget’ – Business

Bears took over at the Pakistan Stock Exchange (PSX) as shares plunged more than 900 points on Tuesday, which analysts attributed to the delay in budget.

The benchmark KSE-100 index plunged 834.24 points, or 1.1 per cent, to stand at 74,741.01 at 3:09pm from the previous close of 75,575.25 points. Finally, the index closed at 74,666.65, down by 908.60 points or 1.2pc, from the previous close.

Raza Jafri, chief executive of EFG Hermes Pakistan, said, “Buyers seem to be shying away as they await the federal budget, as this could impact monetary policy setting.

“The market has thus come off on relatively thin volumes,” he noted.

Mohammed Sohail, chief executive of Topline Securities, credited the bearish momentum to the delay in budget and selling pressure by players.

Awais Ashraf, director research at Akseer Research, attributed the downward trajectory to “increased external financing needs over the next two months are prompting worries about the potential for monetary easing by the State Bank of Pakistan (SBP) and the stability of the exchange rate, which is already under scrutiny due to uncertainties surrounding the budget and the country’s entry into a new IMF programme.”

He also noted that “selling pressure was widespread, particularly impacting banks, fertilizer, exploration and production, and technology firms”.

Shahab Farooq, director research at Next Capital Limited, said, “Increased political uncertainties are taking toll on the equities market despite significantly lower than expected inflation reading for May 2024.”