The ‘election upset’ causes PSX to drop 3.68%
Shortly after opening on Friday, the Pakistan Stock Exchange (PSX) plummeted by 3.68%, or 2,362 points. Following the surprise result in the general elections, panic selling started in, sending the index to a 10-day low of 61,782 points.
Topline Securities CEO Muhammad Sohail made a brief statement, saying, “PSX down…after unexpected election results.”
Partial results of the nation’s general elections on Thursday show that, in contrast to pre-election polls and expectations that the PML-N would form the next parliamentary government at the Center, independent candidates supported by the PTI were leading for the majority of National Assembly seats.
Investors panicked due to the unexpected election results. Due to apparent uncertainty surrounding the election results, they also sold off a portion of their holdings, especially in Karachi, the nation’s center of commerce and seaports.
Subsequently, the PSX benchmark KSE 100 Index saw increasing selling pressure even though it had partially recovered from the intra-day high losses. By 10:32 AM, the benchmark index had dropped 1,385 points, or 2.16%, from its closing value of 64,142 points on Thursday to 62,760 points.
A total of 68 million shares were traded by investors at that time (10:32 AM). All sectors of the market saw selling, but energy stocks saw the biggest increase in pre-election selective purchasing as investors hoped the next government will offer a sound economic blueprint and help the country escape its deepening financial and economic crisis.
According to experts, whomever forms the government will be able to secure a fresh $3 billion IMF loan program after the present one expires in March 2024. The upcoming IMF program needs to guarantee the timely repayment of the nation’s maturing foreign debt and encourage economic expansion in order to generate the necessary job opportunities.
The new government also faces hurdles in lowering the amount of overall debt, managing persistent inflation rates, luring in foreign and domestic capital, and boosting tax income by adding new taxpayers from the retail, wholesale, agricultural, and real estate industries.
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