PSX faces decline as IMF visit impacts market

The Pakistan Stock Exchange (PSX) witnessed a decline on Monday as bearish sentiment took hold, with shares falling by over 250 points. This drop followed a visit by the International Monetary Fund (IMF), causing the benchmark KSE-100 index to close at 75,084, down by 0.34% from the previous day.

Market analysts pointed to concerns over potential increases in electricity prices and additional taxation measures as reasons for the decline. Yousuf M. Farooq from Chase Securities mentioned that the market had recently rallied and some consolidation was expected. The focus now shifts to the upcoming monetary policy, budget, and negotiations for the next IMF program.

Awais Ashraf from Akseer Research linked the bearish trend to investor worries about the ongoing talks between the government and the IMF. Geopolitical concerns were also raised following reports of the death of Iranian President Ebrahim Raisi in a helicopter crash near the Azerbaijan border.

Analysts highlighted key concerns regarding IMF conditions, including demands for tax revenue increases, spending cuts, market-based exchange rate determination, and a tight monetary policy. Shahab Farooq from Next Capital Limited echoed similar sentiments, noting that the market was experiencing profit-taking after a strong performance. Concerns about inflationary taxation measures in the upcoming budget and their impact on interest rate cuts were also discussed.

The PSX's bearish trend reflects a cautious market sentiment influenced by both domestic and international factors. Investors are closely monitoring developments related to IMF negotiations and upcoming economic policies. As the market navigates through these challenges, it remains crucial for stakeholders to stay informed and adapt to changing conditions.