Karachi, June 19, 2023: The Pakistan stock market experienced a sharp decline on Monday, with stocks plummeting by 680 points amid rumors of a stalled loan program with the International Monetary Fund (IMF).
The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) dropped from Friday’s closing of 41,301 points to 40,621 points, reflecting the significant decline.
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Financial analysts at Arif Habib Limited noted that the trading week began with a negative session at the PSX, as investor sentiment was dampened by the news of a potential delay in the IMF program. Initially, the benchmark index opened on a positive note following news of a Chinese loan rollover. However, as the day progressed, market rumors surrounding the stalled IMF program caused a bearish trend, dragging down the index.
The market was characterized by sluggish investor involvement, with third-tier equities dominating the trading activity. Various sectors contributed to the overall market performance, with Exploration and Production (E&P) stocks taking the biggest hit, recording a decline of 140.4 points. The Technology & Communication sector followed, losing 100.7 points, while Commercial Banks experienced a decline of 98.2 points. Other sectors that suffered significant losses included Fertilizer (-84.6 points) and Power Generation & Distribution (-64.6 points).
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Trading volumes saw a slight increase, rising from 156.0 million shares to 179.8 million shares, representing a 15.2 percent day-on-day increase. Similarly, the average traded value surged by 48.9 percent, reaching USD 19.4 million compared to the previous USD 13.0 million.
Among the stocks that contributed significantly to the trading volumes were WTL, KEL, CNERGY, TPLP, and PIBTL. These stocks witnessed heightened activity and played a pivotal role in shaping the market’s direction for the day.
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The uncertainty surrounding the stalled IMF program has had a substantial impact on market sentiment, causing investors to adopt a cautious approach. Many market participants are closely monitoring the developments related to the loan program, as it holds significant implications for the country’s economic stability and growth prospects.
As the trading week progresses, market observers and investors are eagerly awaiting further updates on the IMF program and its potential resumption. The market’s future trajectory will likely be influenced by any new information regarding the loan program, as investors seek clarity and stability to make informed investment decisions.
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