Stock Market Sheds 800 Points Amid Election and Debt Woes

Muhammad Haris

Investor Jitters Intensify as Stock Market sheds by 800 Points in Face of Election uncertainty, circular debt, and maintaining policy rate by state bank of Pakistan.

The stock market remains entangled with uncertainty related to circular debt resolution and political happenings associated with elections, eroding 800 points.

During the outgoing week, the State Bank of Pakistan (SBP) kept the benchmark policy rate unchanged at 22% in the monetary policy committee meeting.

Furthermore, the headline inflation in Jan ’24 arrived at 28.3%, indicating a decline compared to 29.7% in Dec ’23, which kept investors shying away from the market.

Overall, average trading volumes remained down by 24.7% during the outgoing week, clocking in at 312.8 million shares, compared to 415.8 million shares traded in the earlier week.

The benchmark KSE-100 Index lost 810 points during the week, depicting a 1.27% decrease in the index.

Foreign selling continued during this week, totaling $9.7 million compared to a net sale of $22.7 million last week.

Major selling was witnessed in Commercial Banks, amounting to $2.7 million, and Cement at $2.2 million.

An analyst from AKD Securities said that next week will be overshadowed by elections, and market participation is expected to remain subdued.

Following the successful completion of the elections, the market is anticipated to gain momentum. Stock Market Loses over 1000 Points Amid Tension with Iran

Furthermore, the circular debt settlement plan and industrial tariff rationalization plan, if they pass through the IMF node, are likely to boost investors’ confidence, he said.

An analyst from Arif Habib said, “In the upcoming week, we expect the market to remain range-bound as investors will be closely monitoring the General Elections on 8th Feb ’24.

Furthermore, the number of trading days will be limited due to public holidays. With the ongoing result season, certain scrips will remain under the limelight on the expectation of robust results.”