On May 26, 2025, the Pakistan Stock Exchange (PSX) saw significant selling pressure, with the KSE-100 index declining 886.10 points, or 0.74%, to 118,216.57 by 1:13 PM PKT, down from its previous close of 119,102.67.
The downturn reflects investor caution ahead of the delayed 2025-26 federal budget and ongoing uncertainties surrounding International Monetary Fund (IMF) conditions.
Mohammed Sohail, CEO of Topline Securities, attributed the drop to the government’s postponement of the budget announcement from June 2 to June 10, citing inconclusive IMF talks on taxation and fiscal measures. “Lack of clarity on IMF conditions related to the budget is pushing investors to trim exposure,” Sohail noted. Additionally, media reports of disagreements over the circular debt resolution plan have pressured the oil sector, while the onset of rollover week adds to market consolidation.
Budget Delay and IMF Talks
The Finance Ministry confirmed the budget will be presented on June 10, following multiple rounds of discussions with an IMF staff mission, including a wrap-up session with Finance Minister Muhammad Aurangzeb. The delay stems from unresolved issues on IMF-driven fiscal targets, such as exporter and industrial taxes, fueling pre-budget anxiety among investors.
Last week, the KSE-100 shed 718.51 points on May 20, closing at 118,971.12, driven by similar IMF-related concerns. This follows a volatile period, with a 12,474-point recovery the prior week after a U.S.-brokered ceasefire eased India-Pakistan tensions. However, renewed uncertainty has kept investors sidelined, with trading volume dropping to 338 million shares on May 24.
Financial analyst Dr. Bilal Khan from the Lahore School of Economics explains, “The KSE-100’s sensitivity to budget and IMF developments reflects Pakistan’s fragile economic recovery. Clarity on fiscal measures is critical to restore confidence.” Posts on X echo investor frustration, urging swift budget resolution.
