Bears dominated the trading floor on Monday as shares at the Pakistan Stock Exchange (PSX) declined by more than 1,500 points because of “heightened political tensions”.
The benchmark KSE-100 index fell 1370.56 points, or 1.71 percent, to 78,747.33 points at 12 p.m. from its previous close of 80,117.89. Finally, the index finished at 78,539.18 points, down 1578.71 points, or -1.97 percent, from its previous level.
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“Heightened political tensions and media reports on banning Pakistan’s largest and most popular political party have dragged down sentiment,” Yousuf M Farooq, director of research at Chase Securities, told Dawn.com.
“Moreover, after a large rally, a correction was due and heightened political noise has become a reason for a correction,” according to him.
Mohammed Sohail, CEO of Topline Securities, stated that heavy selling by local institutions on Friday, along with political noise, had impacted the market, resulting in the index’s downward direction.
Raza Jafri, CEO of EFG Hermes Pakistan, stated, “Political noise, combined with aggressive institutional selling in Index heavyweight names, has driven the market lower since Friday.”
“Value buying has started to come back cautiously though,” he reported.
On July 15, the federal government announced its decision to outlaw the PTI and initiate Article 6 proceedings against its founder Imran Khan, ex-president Dr Arif Alvi, and former National Assembly (NA) deputy speaker Qasim Suri.
This was interpreted as an attempt to keep the PTI from becoming the largest party in the NA.
“Investors are concerned about the increased political tension caused by the potential ban on the main opposition party amid geopolitical pressures,” Awais Ashraf, director of research at AKD Securites, said.
Shahab Farooq, director research at Next Capital Limited, ascribed the negative momentum to political instability and fears about more rate cuts at the July monetary policy committee (MPC) meeting.
He also stated that “a healthy result season may resume investors’ confidence going forward” – if the political climate stays stable.
[…] Bears continue stampede at PSX as shares lose over 1,500 points due to political disturbances […]
[…] Bears continue stampede at PSX as shares lose over 1,500 points due to political disturbances […]