Monitoring Desk
The bears took control of the Pakistan Stock Exchange (PSX) on Monday, with the benchmark KSE-100 index slumping by over 800 points in intraday trading, as investor sentiment weakened in the absence of clarity over budgetary measures and ongoing negotiations with the International Monetary Fund (IMF).
By 1:13pm, the KSE-100 index had dropped 886.10 points, or 0.74 per cent, to 118,216.57 compared to the previous close of 119,102.67.
Mohammed Sohail, Chief Executive of Topline Securities, attributed the decline to the “delay in the budget announcement” and the “lack of clarity” surrounding the IMF’s conditions, which he said had prompted investors to reduce their exposure.
Yousuf M. Farooq, Director Research at Chase Securities, added that the market is consolidating ahead of the federal budget, citing additional pressure on the oil sector. “Media reports suggesting disagreements with the IMF over the circular debt resolution plan, coupled with the onset of rollover week, have also contributed to the downturn,” he said.
He remained optimistic, however, noting, “We expect a rerating to the upside once there is clarity on key budgetary measures.”
The government has postponed the budget announcement from the original date of June 2 to June 10, as discussions with the IMF on taxation and fiscal measures remain inconclusive. According to informed sources, the visiting IMF mission has held multiple rounds of talks, including a wrap-up session with Finance Minister Muhammad Aurangzeb.
The market had already shown signs of nervousness late last week, with the KSE-100 index closing in the red amid fears of an IMF-driven federal budget perceived as potentially harsh by investors.
The sharp correction comes in stark contrast to the preceding week, when the market rallied by a massive 12,474 points—a reaction largely attributed to the US-brokered ceasefire between two nuclear-armed neighbors. That momentum, however, faded as investors moved to the sidelines awaiting policy clarity from the upcoming 2025-26 budget.
