The Pakistan Stock Exchange (PSX) experienced a significant decline on Monday, with the benchmark KSE-100 index falling over 400 points. The bearish trend came in the wake of an ongoing visit by the International Monetary Fund (IMF) and heightened geopolitical tensions.
At the start of trading, the KSE-100 index showed little movement, maintaining a sideways trajectory until 10:30 AM. However, by noon, the index had dropped by 416.91 points, or 0.55 per cent, from 75,342.34 to 74,925.43.
According to Dawn, Awais Ashraf, Director of Research at Akseer Research, explained that the market’s downturn was largely driven by investor anxiety over the results of the government’s negotiations with the IMF team regarding a new financial programme.
“Investors are particularly concerned about the IMF’s demands for substantial tax revenue increases, reductions in government spending, a market-based exchange rate, and strict monetary policies,” Ashraf noted.
In addition to the economic uncertainties, the market sentiment was further dampened by geopolitical developments. The death of Iranian President Ebrahim Raisi in a helicopter crash added to the unease. Reports confirmed that Raisi, who was considered a hardliner and a potential successor to Supreme Leader Ayatollah Ali Khamenei, died when his helicopter crashed in mountainous terrain near the Azerbaijan border. Iranian officials stated that the crash also claimed the life of Foreign Minister Hossein Amirabdollahian and that the helicopter was completely destroyed in the incident.
The convergence of these economic and geopolitical factors has created a climate of caution among investors, leading to a notable sell-off in the PSX. The market’s reaction underscores the broader anxieties facing the region, combining fiscal policy uncertainty with regional instability.