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PSX Declines Amid IMF Visit and Economic Speculations

PSX Declines Amid IMF Visit and Economic Speculations

Investor Concerns Over Tax Increases and Monetary Tightening Ahead of IMF Program

The Pakistan Stock Exchange (PSX) faced a notable downturn on Monday, with the benchmark KSE-100 index falling by 258.34 points.

This decline was primarily driven by the recent visit from the International Monetary Fund (IMF) and related speculations.

Market Movement and Indices Performance

The trading session began with minimal movement but soon took a downward trajectory.

By noon, the index had dropped by 416.91 points, or 0.55 percent, closing at 74,925.43, down from the previous close of 75,342.34.

Reasons Behind the Bearish Trend

Market analysts attribute the bearish momentum to growing concerns about potential increases in electricity prices and new taxation measures.

The market had recently experienced a substantial rally, so some consolidation was anticipated by financial experts.

Focus Shifts to Monetary Policy and Budget

Investors and traders are now closely watching the upcoming monetary policy, national budget,

and possible adjustments from the next IMF program. These factors are crucial as they are likely to influence market directions in the near term.

Geopolitical Tensions Adding to Market Anxiety

The market’s cautious sentiment was further exacerbated by geopolitical tensions, particularly following the reported death of Iranian President Ebrahim Raisi in a helicopter crash near the Azerbaijan border.

IMF Expectations and Market Reactions

Market participants are particularly anxious about the IMF’s expectations, which reportedly include significant tax revenue increases, reductions in government spending, a shift towards a market-based exchange rate, and maintaining tight monetary policy.

Profit-Taking and Previous Market Gains

The market’s current reaction also involves profit-taking after a significant rise in previous sessions, with the KSE-100 gaining over 2,700 points recently.

Apprehensions About Future Economic Measures

With ongoing discussions about a more extensive and prolonged program with the IMF, there are fears that the upcoming budget might introduce inflationary taxation measures. Such measures could impact interest rate trends and overall market sentiment, further contributing to investor apprehensions.


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