PSX drops over 900 points

KARACHI:

Pakistan’s stock market (PSX) fell sharply on Tuesday, plummeting more than 900 points during the session, after former prime minister Imran Khan and his close aide, former foreign minister Shah Mahmood Qureshi, were both sentenced to 10 years in prison. the encryption case.

Market analysts attributed the panic selling to concerns over the law and order situation and the intensifying political crisis, especially with the upcoming general elections scheduled for February 8. Foreign investors reportedly participated in the massive sell-off, fearing the potential impact on the market.

The benchmark PSX KSE-100 Index closed at a one-month low of 61,842 points, down 1.48% or 932 points on the day. The decline was widespread, affecting top volumes in the energy, telecommunications and banking sectors.

Chase Securities Director of Research Yousuf M Farooq identified political developments as a contributing factor to the market decline. “The imprisonment of Imran Khan and Qureshi was one of the reasons, not the only reason for the latest fall in PSX,” he said, speaking to The Express Tribune.

Read more: Imran and Qureshi sentenced to 10 years in jail in cypher case

The other factors, he said, included continued foreign selling in recent days and keeping the State Bank of Pakistan (SBP) at a record 22% for the next six weeks.

Farooq expressed optimism about the market outlook, noting that the economy has stabilised, with rising sales revenue and profits for listed companies.

However, he cautioned that the future course of the market depends on the political situation, urging stability for a positive resumption of the uptrend.

Tuesday marked the fourth straight trading day of significant selling on the PSX, resulting in a cumulative decline of 4.60% or 3,000 points over the past four days.

The market had reached an all-time high of 67,094 units at the end of December 2023.