KSE-100 index closes below 40000-mark as political situation roils investors – DAWN.com

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index closed below the 40,000-mark on Thursday as the ongoing “unsettled” political situation prompted a sell-off from nervous investors.
According to the PSX website, the index was at 40,034.15 points, down 425.55 points or 1.05 per cent, from the previous close of 40,459.70 at 1:05pm. It returned above the 40,000-mark briefly before going back down and eventually closing at 39,831.75 points — 1.55 per cent lower than the previous day’s close.
Raza Jafri at Intermarket Securities said that the political situation remained “unsettled” which was feeding into an “acute lack of confidence in markets”.
“Pakistan has signed a staff-level agreement with the International Monetary Fund (IMF) but confidence is short. For confidence to return, we either need pledges of support from friendly countries or a cooling down of the political situation or a combination of both,” he said.
Ahsan Mehanti, Arif Habib Corporation director, said the stock market was witnessing bearish activity on “political noise and dismal earnings outlook amid a record fall in the rupee and surge in energy prices”.
“The IMF’s new conditions on assurance over Saudi receipts ahead of the release of $1.7bn tranche and uncertainty over funding from friendly countries played a catalyst role in the bearish activity,” he said.
Earlier this week, Bloomberg reported that the Fund was “assessing Saudi Arabia’s commitment to financing Pakistan before it disburses fresh funds to the South Asian nation.”
However, federal Minister for Planning and Development Ahsan Iqbal has asserted that the IMF is not adding new conditions to the staff-level agreement it concluded with Pakistan last week.
Chief executive of First National Equities Limited, Ali Malik, said that investors’ confidence had been affected due to the political situation and the depreciation of the rupee.
He noted that foreign investors were also exiting the market. He added that the market could further deteriorate unless institutions intervened.
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