KARACHI: The Pakistan Stock Exchange (PSX) faced selling pressure on Monday, as investors opted for profit-taking in the absence of fresh positive triggers, while concerns over falling cement prices and the upcoming IMF review further weighed on market sentiment.
The KSE-100 Index initially gained 50.21 points (0.04%) to hit an intraday high of 112,851.14, but later dipped to a low of 111,857.33, reflecting a 943.6-point decline (-0.84%) from the previous session’s close of 112,800.93.
Key Market Drivers
- Profit-Taking by Institutional Investors: Investors booked profits amid uncertainty over economic conditions and the lack of new positive catalysts.
- Cement Price Decline: Weakness in cement stocks added pressure on the market.
- IMF Concerns: Traders exercised caution ahead of the IMF’s technical review, which is crucial for Pakistan’s financial stability.
IMF Review and Economic Developments
Finance Minister Muhammad Aurangzeb reaffirmed the government’s commitment to tackling tax evasion and corruption, as Pakistan negotiates with the IMF to secure further economic assistance.
- A four-member IMF technical delegation has arrived for a three-day visit, focusing on climate financing and economic reforms.
- Another IMF delegation is expected next month to discuss Pakistan’s $7 billion Extended Fund Facility (EFF) and Islamabad’s request for an additional $1-1.5 billion in funding.
Foreign Reserves and External Pressures
- SBP’s foreign exchange reserves increased by $35 million to $11.20 billion as of February 14.
- Total liquid foreign reserves: $15.95 billion (including $4.75 billion held by commercial banks).
- Debt payments remain a challenge, with $252 million wiped off reserves in the previous week.
Market Outlook
Despite a weekly gain of 716 points (0.64%) last week, market analysts suggest that:
- Investors remain cautious ahead of the IMF review.
- Institutional investors are locking in gains due to uncertainty in macroeconomic conditions.
- The PSX’s future direction hinges on the IMF negotiations, corporate earnings, and economic stability.
With external financing pressures mounting, market sentiment remains fragile, making the upcoming IMF talks critical for Pakistan’s economic and stock market stability.
