Karachi, December 19, 2024 – The Pakistan Stock Exchange (PSX) on Thursday experienced a dramatic downturn, closing with a significant loss of 4.32% amid widespread negative sentiments triggered by the introduction of a new tax bill by the government of Pakistan.
The KSE-100 index plunged by 4,795 points to settle at 106,275 points, marking the largest single-day decline in Pakistan’s stock market history. This sharp drop followed the previous day’s heavy loss of 3,790 points, compounding concerns among investors. The market’s slide from its December 16, 2024, peak of 116,169 points has now reached nearly 10,000 points over the course of just three trading sessions.
Analysts attributed this significant decline to the Tax Laws (Amendment) Bill, 2024, introduced by the government of Pakistan a day earlier. The proposed legislation includes stringent measures against tax non-filers, sparking panic among market participants. These harsh actions have unsettled investors, leading to widespread sell-offs across key sectors, including chemicals, commercial banks, power generation, and refineries. Major index-heavy stocks, such as MARI, HUBCO, NRL, HBL, NBP, MCB, and UBL, all traded in the red.
The market witnessed sustained selling pressure throughout Thursday’s session, with the benchmark index hitting an intra-day low of 106,075 points. Despite attempts at recovery during early trading hours, the rebound proved short-lived as profit-taking resumed, pushing the index deeper into negative territory.
Intermarket Securities Limited commented in a note, “The negative trend may persist; however, further downside creates a buying opportunity, particularly for investors who missed the recent rally since late November. Key factors driving the market—liquidity, falling interest rates, and reduced political noise in Pakistan—remain supportive.”
This dramatic downturn has raised concerns about Pakistan’s market stability. While the PSX has recently benefited from favorable economic indicators, the abrupt policy shift signaled by the new tax proposals has introduced significant uncertainty.
Investors will closely monitor the government’s next steps, as well as potential clarifications on the tax measures, which could determine the trajectory of Pakistan’s market in the coming days. The recent losses underscore the fragility of investor confidence and highlight the critical need for transparent policymaking to ensure market stability in Pakistan.