KARACHI, June03(ABC): The Pakistan Stock Exchange (PSX) Friday remained under pressure due to selling in almost all sectors on investor concerns over economic uncertainty in the country. The market opened slightly in the green, however, it was quick to enter the red zone.
The benchmark KSE-100 index opened at 42,310.94 points and at close, it recorded a decrease of 923.03 points, or 2.19%, to settle at 41,314.88 points.
Speaking to Geo.tv, BMA Capital Executive Director Saad Hashemy termed the plunge a “short-term reaction”.
The analyst said: “The market reacted to the massive hike in the price of petroleum products by the government which fuels inflationary concerns”.
A day earlier, the federal government dropped a fuel bomb on the nation to meet the conditions imposed by the International Monetary Fund (IMF) for the revival of the stalled multibillion-dollar programme.
The federal government decided to raise the prices of all petroleum products with the exception of one by another Rs30, just a week after making a similar increase — hours after the National Electric Power Regulatory Authority (NEPRA) approved a massive increase of Rs7.91 per unit in the power tariff.
The new fuel prices came into effect from midnight — petrol is now available at Rs209.86 per litre, high-speed diesel (HSD) at Rs204.15, and kerosene oil at Rs181.94 and light diesel oil at Rs178.31. Only the price of kerosene oil was increased by less than Rs30.
Hashemy, however, added that the PSX would bounce back once positive developments regarding the IMF programme are notified.
Moreover, Moody’s downward grading also affected the investment climate negatively as the credit rating agency cited Pakistan’s heightened external vulnerability risk and uncertainty around the sovereign’s ability to secure additional external financing to meet its needs as major reasons behind its decision.