IMF loan uncertainty weighs on stocks

As the earnings season nears its end, the Pakistan Stock Exchange (PSX) faced a marginal decline on Tuesday amid reports that the International Monetary Fund (IMF) board meeting agenda did not feature approval of a $7 billion loan for Pakistan and uncertainty over securing $3-5 billion in external financing. The trading day started on a strong note, with the KSE-100 index hovering around the psychological level of 78,000 points. It soon reached the intra-day high of 77,930.03 but the positive momentum could not be sustained. The index began to fall rapidly, weighed down by political instability, rising imports and uncertainty about IMF’s conditions related to taxes and power subsidy. The market subsequently dipped to the intra-day low of 77,460.39 points. In the latter half, selective buying in sectors like banks and oil and gas helped the index recover most of the losses. However, it still closed below the 78,000 mark.