The Pakistan Stock Exchange (PSX) witnessed significant losses on Tuesday. The KSE-100 index dropped sharply by over 900 points, marking a 1.48% fall from the previous close.
The week opened with a steep drop of more than 1,000 points, the largest in over a month. Analysts link these losses to profit-taking before the monetary policy announcement. Key energy stocks like K-Electric Limited and Hascol Petroleum Limited saw notable activity.
Market Volatility Amid Political and Economic Factors
Shahab Farooq of Next Capital Limited cites political uncertainty before the February 8 elections as a primary cause of the downturn. He also mentioned foreign selling as a limiting factor for market performance and predicted short-term volatility.
Yousuf M. Farooq from Chase Securities highlighted the impact of foreign selling and election uncertainty. He expressed concern over the State Bank of Pakistan’s (SBP) inflation outlook but noted that inflation might decline in the coming months.
The SBP held the interest rate at 22% and raised the inflation target to 23-25% for the year. Farooq anticipates possible interest rate reductions in March but expects political uncertainty to continue affecting the market.
Abdul Azeem from Spectrum Securities Limited observed a significant index contraction. He attributed this to political uncertainty and sustained foreign selling. The recent conviction of political figures and foreign sales of $17.7 million in shares have dampened investor confidence.
Additionally, Azeem mentioned the rise in international oil prices contributing to market instability.
