PSX loses 700 points

Karachi: The Pakistan Stock Exchange (PSX) Monday lost over 700 points and the analysts attributed the steep fall to the uncertain political conditions of the country.

The benchmark KSE-100 index closed at 47,447.95 points, down 770.54 points or 1.6 per cent from the previous close of 48,218.49 points, the PSX website exhibited.

Intermarket Securities Head of Equity Raza Jafri said despite improvement in the last few months, the economy was still vulnerable.

He said July’s large current account deficit was raising concerns of further interest rate hikes especially as inflation was still high.

He added a lack of clarity on circular debt settlement was also affecting investor sentiment.

Last week, the State Bank of Pakistan reported that the current account deficit (CAD) reduced by 36 per cent to $809 million in July FY24 compared to $1.261 billion in the same month of the previous fiscal year.

“July’s current account is in deficit for the first time after four months of surpluses. June see a surplus of $504m,” he explained.

Aba Ali Habib Securities Research Head Salman Naqvi attributed today’s losses to political uncertainty and the deteriorating law and order situation in the country.

The Oil and Gas Development Company (OGDC) had last week informed investors that the company hadn’t received any formal communication from authorities on the settlement of the circular debt, he said further.

“This doesn’t mean that this circular debt settlement is not in the pipeline… it is, but there is definitely an uncertainty surrounding the matter,” he added.

“The market was on a “correction course” and predicted that would continue for the next few days,” he said.

These and other factors have shrunk the market confidence. For the time being, there is a dent in the market until some good news comes, others said.