The Pakistan Stock Exchange (PSX) witnessed a remarkable turnaround on Tuesday, rebounding from an initial plunge of over 1,450 points in response to concerns raised by the International Monetary Fund (IMF) regarding the government’s circular debt plan.
Despite hitting an intra-day low of 59,613.17, the KSE-100 index staged a recovery, reaching around 61,427.16 by 2:20pm, marking an increase of 361.85 points or 0.59%. However, index-heavy energy stocks such as OGDC, PPL, PSO, and SNGP remained in negative territory.
The IMF’s criticism of the interim government’s tariff rationalization and circular debt management plans contributed to the earlier market negativity. According to IMF Mission Chief Nathan Porter, these plans fail to address the underlying issues in Pakistan’s energy sector, emphasizing the need for broad-based reforms.
Market sentiment was further dampened by political uncertainty surrounding the formation of a coalition government. Analysts noted that OGDC and PPL led the market’s downward trajectory following the IMF’s remarks.
However, the market’s recovery was attributed to strong corporate performances, with Allied Bank Limited posting significant profit growth in 2023. Analysts also cited expectations of a coalition government soon as a factor driving the market upwards.
Despite challenges posed by the IMF’s stance and political uncertainty, market optimism remains buoyed by hopes of improved governance and economic stability under a new government.
