Shares at the Pakistan Stock Exchange (PSX) experienced a significant downturn on Friday, with stocks plummeting by more than 1,000 points as ongoing political uncertainty continued to weigh on investor sentiment.
By midday, the benchmark KSE-100 index had dropped by 984.38 points, reaching 60,035.67 from the previous close of 61,020.05 points. By the end of trading, the index had fallen further, recording a cumulative decline of 1,000.85 points (1.64 percent), closing at 60,019.20 points.
The market downturn followed news of political developments, including the nomination of candidates for prime minister and Punjab chief minister by the PTI, as well as the PPP’s hesitation to join PML-N leader Shehbaz Sharif’s cabinet despite offering support for his candidacy as prime minister. These factors contributed to deepening political uncertainty, prompting investors to offload their positions and leading to the erosion of overnight gains.
Analysts pointed to the uncertainty surrounding the formation of a new coalition government as a key driver behind the bearish momentum. Mohammed Sohail, CEO of Topline Securities, highlighted that leveraged players were compelled to trim their positions amid the political ambiguity.
Meanwhile, Awais Ashraf, director of research at Akseer Research, expressed concerns about the potential formation of a weak coalition government and the impact of protest calls by political parties on the implementation of necessary economic reforms for recovery.
Yousuf M. Farooq, director of research at Chase Securities, noted that selling pressure was also observed in state-owned entities such as the Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) due to delays in circular debt resolution and ongoing political uncertainty.
The interim government’s decision to increase natural gas prices by 45 percent to meet IMF requirements and revenue targets further added to market concerns, with fears of inflationary pressure intensifying.
Overall, the PSX’s sharp decline reflected the market’s apprehension regarding the prevailing political and economic uncertainties, underscoring the challenges facing investors amid a volatile environment.
