Bears take hold of PSX as shares plunge over 1,700 points on political noise

The Pakistan Stock Exchange (PSX) witnessed accelerated selling pressure on Friday as the benchmark index shed more than 1,700 points in trading on what most analysts agreed was political noise.

According to the PSX website, the KSE-100 index declined by 1721.97 points, or 2.1 per cent, to sink to 80,117.89 at close from the previous close of 81,839.86.

“Recent political noise seems to have led to some profit-taking as the PSX has rallied more than 28 per cent during the year,” Amreen Soorani, head of research at JS Global, told Dawn.com.

Shahab Farooq, director of research at Next Capital Limited, attributed the bearish momentum to “general profit taking amid political noise”.

Regarding the next Monetary Policy Committee (MPC) meeting, Farooq said, “Further cut in the policy rate in the upcoming MPC meeting with July inflation expected around 11.5 per cent, along with corporate results season may resume investors’ confidence — keeping political risk aside.”

Yousuf M Farooq, director of research at Chase Securities, stated, “The market has corrected on increasing political noise in the country.

“It is important to note that the index has seen a sharp rally on the back of a stabilising economy, lower inflation, improved current account, and the expectation of lower interest rates,” he said, adding that they expect the stabilisation to continue with the board approval of the next International Monetary Fund (IMF) programme.