The Pakistan Stock Exchange (PSX) witnessed a sharp decline of over 1,000 points on Wednesday, a day following the oath-taking of the new federal cabinet led by Prime Minister Shehbaz Sharif.
During intraday trading, the benchmark KSE-100 index dropped to 64,694.27, marking a significant loss of 1,061.03 points or 1.61% from the previous close of 65,755.30.
Business journalist Afreen Mirza attributed the market reaction to the announcement of the new federal cabinet, highlighting the appointment of Muhammad Aurangzeb to the “most important Q-block”.
“Investors are reacting to the news amid rumors indicating that Aurangzeb might be appointed as the Minister of Finance, with an added responsibility for the Revenue Division. This speculation suggests the likelihood of another minister eventually assuming this portfolio,” she noted.
Mirza further indicated that investor sentiment was also impacted by skepticism surrounding the upcoming International Monetary Fund (IMF) talks scheduled for the week.
Reasons Behind Market Downturn
Cabinet Announcement
The market responded to uncertainties regarding the portfolio allocation in the new cabinet, particularly focusing on the finance ministry and Revenue Division responsibilities.
IMF Talks
The previous day, the stock market had a slightly lower closing, initially surging to over 66,100 points during the session, as investors evaluated the implications of the new government’s economic policies.
Investors displayed caution and apprehension ahead of the commencement of discussions with the International Monetary Fund (IMF) this week.
The KSE-100 closed with a decline of 38.45 points or 0.06%, settling at 65,755.31 points.
Analyst Ahsan Mehanti of Arif Habib remarked, “Stocks closed under pressure amid weak global equities and concerns for economic uncertainty.”
He further highlighted that uncertainties surrounding the upcoming monetary policy announcement on March 18 and the outcome of government negotiations for new IMF loans played significant roles in the negative market close.
