Pakistan Stocks Shed 501 Points on Budget Uncertainties

Pakistan Stocks Shed 501 Points on Budget Uncertainties

Karachi, June 10, 2024 – Pakistan stock market experienced a significant decline on Monday, with the KSE-100 index falling by 501 points amid investor uncertainties surrounding the upcoming 2024-25 budget.

The benchmark index of the Pakistan Stock Exchange (PSX) ended the day at 73,253 points, down from the previous closing of 73,754 points on June 7, 2024.

Analysts at Topline Securities reported that the trading day at Pakistan stocks began on a positive note, with the KSE-100 index reaching an intraday high of 73,915 points, an increase of 161 points (0.22%). However, this upward momentum was short-lived as a wave of selling ensued at the day’s peak, driving the index into negative territory. The index closed at 73,253 points, marking a 0.68% decline.

At Pakistan stocks, the selling pressure was largely driven by investor concerns over potential tax hikes in the upcoming budget. Speculations about increased taxes on dividends, capital gains, and interest income contributed to the market’s volatility. Additionally, uncertainty regarding the monetary policy announcement scheduled for later in the day added to investor apprehensions at Pakistan stocks.

“The market’s decline today is primarily due to fears of tax increases in the upcoming budget and uncertainties around the monetary policy announcement,” said a Topline Securities analyst.

Several major stocks significantly impacted the index’s performance at Pakistan stocks. HUBC, FFC, MEBL, OGDC, and PPL collectively subtracted 254 points from the index. On the positive side, SRVI, PSO, SYS, NATF, and MTL contributed a combined 65 points, partially offsetting the overall decline.

Despite the downturn, trading activity remained robust. Over 348 million shares were exchanged, amounting to a total value of Rs 10.1 billion. PASL led the volume chart with over 56.9 million shares traded.

“The market is in a state of flux with the budget announcement looming,” commented another market analyst. “Investors are cautious, and the potential for increased taxes is weighing heavily on sentiment.”

As the fiscal year progresses, the market will be closely watching the government’s fiscal policies and their impact on economic conditions. The upcoming budget is seen as a critical factor that could influence market trends and investor confidence in the near term.

For now, the significant drop in the KSE-100 index reflects the prevailing uncertainties and cautious sentiment among investors, highlighting the need for clear and favorable fiscal policies to stabilize the market and boost investor confidence.