KARACHI: On Tuesday, the KSE-100 index of the Pakistan Stock Exchange (PSX) fell by more than 1,400 points during intraday trade.
The KSE-100 Index was down 1,342.96 points, or around 3.40%, at 3:17 PM, and was circling the 38,377.79 level.
The slaughter in the stock market was brought on by both the protracted political unrest in the nation and the delay in the renewal of the International Monetary Fund’s (IMF) lending programme.
Analysts claim that this severe selloff in the market was caused by the dissolution of the Punjab Assembly and the ongoing instability in the nation amid persistent calls for hasty elections from Pakistan Tehreek-e-Insaf (PTI).
The Shehbaz Sharif government has been under pressure to revive the IMF programme but the “harsh conditions” set by the Washington-based lender have made it almost impossible for the country’s financial managers to proceed.
Meanwhile, the depleting forex reserves with the State Bank of Pakistan below the $5 billion mark — enough for less than three weeks of import — is making the investors jittery.
On Monday, the PSX began another week on a bearish note with the benchmark index plunging over 600 points as the market reacted to the repercussions of political uncertainty.
The index dropped below 40,000 points against a backdrop of a deteriorating political situation coupled with weak economic data.
The political unrest caused by the struggle for power in the nation, the dissolution of the Punjab assembly, and the elections for local bodies in Sindh had an effect on the business climate.
Further dampening investor confidence were worries about monetary policy rate increases, the rupee’s decline versus the dollar, and the postponement of the ninth review of the International Monetary Fund (IMF) programme.