The Pakistan Stock Exchange (PSX) experienced tremendous selling pressure as the benchmark KSE-100 index fell more than 900 points on Tuesday.
The fall in the market occurred at the same time as the rupee fell to a record low against the US dollar.
According to the PSX website, the KSE-100 Index started at 41,367.11 points and increased by 176 points initially. However, the market later declined and the index had fallen 1,053.33 points to reach 40,313.78 points around 3:25pm.
The index closed at 40,389.07, decreasing 978.04 points during the day.
Arif Habib Corporation’s Ahsan Mehanti told local media that the stock market was being impacted by the rupee’s devaluation.
He clarified that the recent decline in the average trading volume was due to investors’ current preference for secure assets.
Head of Research at Intermarket Securities Raza Jafri told local media that the PSX’s steep loss was a result of “panic” moving from the currency market to equities.
According to him, the market was concerned that adhering to the IMF program may prove to be “politically tough”. He further added that Pakistan was unable to afford this and investors were fearful.
Aba Ali Habib Securities Head of Research Salman Naqvi, in a comment to local media, attributed the market’s decline to both political unrest and Fitch’s lowering of Pakistan’s outlook from stable to negative.
