The sell-off in the stock market continued from the previous day after the rise in fuel prices by the government and the KSE-100 index saw a...
The sell-off in the stock market continued from the previous day after the rise in fuel prices by the government and the KSE-100 index saw a decline of more than 900 points.
At 4 pm, the KSE-100 index fell 926 points to 41,312 points (down 2.19%) from the previous day's 42,238 points.
The market closed at 41,339 points, down 899 points (2.13%).
According to analysts, the downtrend in the stock market today is a result of the government's decision to increase the prices of petroleum products by Rs 30 per liter and the announcement by the power regulator to increase electricity prices by about Rs 8 per unit.
Also read: Rising stock prices following rise in petroleum product prices
The increase in prices of petroleum products was announced by Finance Minister Muftah Ismail at a press conference to finalize the agreement with the International Monetary Fund (IMF).
Rising fuel prices and electricity tariffs are among the key conditions the government needs to meet to restart the 6 6 billion IMF program, which has been stalled since April.
The PTI government had frozen petrol and electricity prices for four months from February 28 to June 30.
However, even after taking power, the PML-N and other parties have been sharply criticizing the former government for "derailing" the IMF program, but the subsidy was not withdrawn till May 26.
Read more: Stock Exchange declines, 100 Index loses 660 points
Later on May 26, the prices were increased by Rs 30 per liter and last night the prices were increased by another Rs 30.
Muftah Ismail said that this decision would increase inflation and increase the hardships of the people but we cannot allow the country to go bankrupt due to wrong decisions of the previous government.
Raza Jafari, head of Intermarket Securities, said that the overnight rise in prices of petroleum products has brought the necessary IMF program closer to resumption, while at the grassroots level, it will reduce discomfort and demand.
He told Dawn.com that current investors are moving out of the circle while new investors are still retreating, so the stock is falling at a lower volume.
Also read: 500-point rally in the stock market with hopes of easing political tensions
Meanwhile, Salman Naqvi, head of research at Aba Ali Habib Securities, pointed out a number of other factors that contributed to the downturn in the Pakistan Stock Exchange.
Speaking to DawnNews.tv, he said that the uncertainty on the political and economic fronts, the stabilization of the ratings by Moody's, the skyrocketing inflation, the rise in interest rates on treasury bills and the rise in the IMF. The market is under pressure due to delays.
According to a report by Mattis Global, the widening trade deficit in the country is also one of the reasons for low confidence of investors.
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