KARACHI: Pakistan Stock Exchange (PSX) lowered 1.53 percent last week due to persistent financial woes while signs of any significant recovery remain off the table following pessimism surrounding the International Monetary Fund (IMF) loan revival programme and the upcoming budget.
The benchmark KSE-100 Index shed 634.64 points last week to close at 40,964.54 points. The PSX remained lacklustre amid low-volume sessions and ended four out of five sessions last week in red. After gaining 111.58 points (+0.27 percent) by the benchmark index in the preceding week, the market turned bearish on Monday and Tuesday and the KSE-100 Index lost 404.12 points and 95.76 points respectively to fall to 41,099.30 points.
After losing around 500 points in the first two sessions of the week, the bourse gained 18.02 points in a low-volume session on Wednesday on the back of an oversold situation. In the very next sessions, the market settled 87.65 points lower to 41,029.67 points. The situation was not different on Friday when the benchmark index lost 65.13 more points, falling below the psychological level of 41,000 points to 40,964.54 points. The bullish momentum remained a far cry in any session of the week as cautious investors remained on the sideline due to the current economic situation of the country.
Among other indices, the KSE All Share Index came down by 0.83 percent to 27,416.02 points from 27,644.46 points, while KMI All Share Islamic Index decreased by 0.46 percent to 19,840.14 points from 19,931.26 points on a week-on-week basis. The benchmark KSE-100 Index moved in a range of 906.48 points in the week, touching the high level of 41,690.27 points during intraday trade on Monday and the lowest level of 40,783.79 points during its last session.
Finance Minister Ishaq Dar while talking to industrialists on Wednesday dropped a hint that the IMF programme may expire on June 30 without revival due to restricted time, saying, “Our efforts are aimed at completing the second IMF programme in the country’s history, although time has been restricted and the programme is ending on June 30.” This turned investor sentiment predominantly negative, as it increased the prevailing uncertainty about the resumption of the IMF programme.
Prime Minister Shehbaz Sharif, later in the week, said that an agreement is not being reached with the IMF, but underscored that China’s support will play a crucial role in preventing the country from facing any potential default. Emphasising the government’s commitment to completing the IMF programme, he said that China has demonstrated support by rolling over its commercial debt and also highlighted the goodwill of friendly countries towards Pakistan’s development.
Later, Pakistan once again approached the US to convince the Washington-based money lender to strike the staff-level agreement post-haste. The issue came under discussion during a meeting between US Ambassador Donald Blome and Ishaq Dar.
The government has not yet come up with a credible alternative plan, which is creating panic in markets as rupee is trading in the range of Rs310 to Rs313 to a dollar in the open market.
Another key event drawing attention is the upcoming budget presentation scheduled for 9th June. Market observers are closely monitoring this event as well, as it can have a substantial impact on investor sentiment and market trends.