PSX Sees Bearish Trend Amid Global Trade War Concerns
The PSX's decline is attributed to global trade war concerns, profit-taking, and local political uncertainty, with the IMF talks and economic indicators closely watched for future market direction.
The Pakistan Stock Exchange (PSX) experienced a decline in its KSE-100 index on Tuesday, shedding 809.63 points, or 0.72%, to settle at 111,935.38, primarily due to concerns over a global trade war and a slump in international crude oil prices.
Analysts attributed the decline to profit-taking, local political uncertainty, and foreign fund outflows, which contributed to the negative sentiment in the market. The passage of the Sindh Agricultural Income Tax Bill in the provincial assembly and a potential successful International Monetary Fund (IMF) programme review were highlighted as key triggers for a positive outlook. However, selling was observed in key sectors, including commercial banks, fertiliser, oil and gas exploration companies, and OMCs, with index-heavy stocks such as PSO, SSGC, SNGPL, MARI, POL, PPL, MEBL, and UBL trading in the red.
The market's decline was also influenced by the global trade war, with the announcement of US tariffs on Canada, Mexico, and China affecting investor sentiment. The State Bank of Pakistan (SBP) purchased $3.8 billion to strengthen foreign reserves, while the rupee's exchange rate remained stable. The International Monetary Fund (IMF) mission is due to arrive for talks with the government, which could impact the market's direction. Major economic indicators, including oil prices and dollar-yen rates, remain closely watched.
Brokers projected the market to remain range-bound due to upcoming IMF talks, with investors viewing current market levels as unattractive. The KSE-100 index declined by 947.35 points or 0.85% to 110,988.03, marking the fourth straight loss on domestic selling pressures amidst uncertainty on the economic front. Calls for the resolution of the Kashmir dispute and the China Pakistan Economic Corridor (CPEC) project were also made, highlighting the need for stability and progress in these areas to spur market sentiment.
As the market continues to face challenges, investors and analysts await the outcome of the IMF talks and the government's efforts to address the economic uncertainty. The PSX's performance will be closely watched in the coming days, with hopes that a successful IMF programme review and progress on key projects will help to boost market sentiment and stabilize the economy.