Bears dominated the Pakistan Stock Exchange (PSX) on Thursday as shares witnessed a spike in selling pressure, with analysts attributing the losses to “ambiguity on the political landscape”.
The KSE-1000 index lost 936.97, or 1.51 per cent, to stand at 61,216.87 at 2:52PM from the previous close of 62,153.84 points.
On Wednesday, the index had rallied following a formal announcement by PML-N and its allies, including the PPP, for the formation of a coalition government which restored investor confidence. As a result, the KSE 100 index partially recovered the overnight losses and settled above the 62,000 level.
Speaking to Dawn.com today, Tahir Abbas, head of research at Arif Habib Limited, said: “The market is reacting negatively amid ambiguity on the political landscape.”
Additionally, he attributed the bearish momentum to “companies with high dependency on natural gas” as cost of production was expected to increase given the gas tariff hike, which would result in lower margins and profitability.
Shahbaz Ashraf, chief investment officer at FRIM Ventures, credited market experiencing the 900-point loss primarily to “unclarity on the political set-up going forward”.
Shahab Farooq, director of research at Next Capital Limited, said that the market was starting to focus on the “imminent challenges ahead”, particularly the next government’s task of negotiating with the International Monetary Fund (IMF) for a new and bigger programme as deemed necessary for external account sustainability.
However, a new IMF programme is expected to follow “more stringent conditions” which has made equities move down with low participation, he added.
