IMF’s delay continues to take toll on stock market

KARACHI: The Pakistan Stock Exchange (PSX) witnessed a slight decline yesterday (Wednesday), closing the trading day nearly 100 points below opening level.

The benchmark KSE-100 index closed at 77,992.78 points after opening the day at 78,084.24 points. This dip was attributed to escalating concerns over the country’s fragile economic outlook and uncertainties regarding the extension of $9 billion in loans.

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Following the trend of the past few weeks, the index showed some improvement early in the day climbing to the day’s highest at 78,334.60 points. However, this upward momentum was short-lived.

The reports of delay in Pakistan’s inclusion in the International Monetary Fund’s (IMF) board meeting agenda for the Extended Fund Facility (EFF) has been casting a shadow over market sentiment for several days now. Wednesday was no different.

The delay is believed to be linked to an unresolved financing gap, coupled with widespread protests against elevated taxes and steep industrial power tariffs. Despite a brief midday boost from Moody’s decision to upgrade Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa2 with a positive outlook, the market remained under pressure. As a result, the index fell below the 78,000 threshold, touching an intra-day low of 77,990.34 points.

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The political climate of the country, including protests against higher taxes, as well as closure of state-owned Utility Stores Corporation (USC) is also adding to market uncertainty.