Political uncertainty takes its toll on stock market

KARACHI: The Pakistan Stock Exchange (PSX) witnessed a sharp decline yesterday (Tuesday), after initial rally. Trading opened on a positive note, with the benchmark index reaching its intraday high at 82,010.09 points. However, the early optimism was short-lived, as increased selling pressure dragged the market lower.

Stock market declines despite initial rally

Analysts attributed the slump primarily to political instability and a depreciating currency, causing investor confidence to erode.

Profit-taking in major stocks, particularly in the energy and financial sectors, contributed to the overall decline.

Some market experts said the decline also came due to government’s move to reassess and potentially terminate agreements with independent energy producers due to concerns over capacity payments and the mounting circular debt. Additionally, fears of regulatory action against the financial sector for currency market manipulation added to the bearish sentiment, news reports said.

As a result, the index dipped below the 82,000 points mark, hitting its intraday low at 81,107.38 points. Some of these losses were recovered before the day end, but the market still closed 360 points below the opening at 81,483.64 points.

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Trading volumes dropped compared to the previous session, while the total value of shares traded was also lower.