ISLAMABAD: The Pakistan Stock Exchange (PSX) on Tuesday dropped more than 2,000 points, with analysts attributing the decline to a lack of progress in the Istanbul talks with Afghanistan and economic uncertainty.
The benchmark KSE-100 index fell 2,062.79 points, or 1.27 percent, to close at 160,101.02 points, compared to the previous day's close of 162,163.8 points.
The development came as talks between Pakistan and Afghanistan entered their fourth day in Istanbul with no breakthrough as Islamabad made a "last-ditch effort" to persuade Kabul to act against militants.
A possible collapse of talks has raised fears about economic uncertainty in the country, which has been navigating a long path to recovery under a $7 billion International Monetary Fund (IMF) program.
"Stocks slump amid security unrest on unresolved Pak-Afghan border tensions and State Bank of Pakistan (SBP) status quo in policy rates," Ahsan Mehanti, chief executive officer of Arif Habib Commodities, told Arab News.
"Economic uncertainty amid falling exports, rising inflation played a catalyst role in selling activity in the futures rollover at PSX."
The Monetary Policy Committee of Pakistan's central bank on Monday decided to keep the policy rate unchanged at 11 percent at a time when SBP is juggling modest economic growth, external‐sector vulnerabilities and inflation risks.
Meanwhile, the Karachi-based Topline Securities market research firm projected Pakistan’s headline inflation, measured by the Consumer Price Index (CPI), to rise 5.25–5.75 percent year-on-year in October.
In its daily market review, Topline Securities said the index witnessed a tug of war between bullish and bearish investors.
"The mixed performance was largely attributed to the ongoing futures rollover week and a spate of corporate earnings announcements, which kept investors cautious and triggered profit-taking across key sectors," it added.
"Losses were mainly driven by Hub Power Company (HUBC), Meezan Bank Limited (MEBL), Habib Bank Limited (HBL), Oil and Gas Development Company (OGDC), and United Bank Limited (UBL), collectively shaving off 585 points from the index," the market research firm continued.
"On the flip side, Lucky Cement Limited (LUCK), Pakistan Services Limited (PSEL), Service Industries Limited (SRVI), Bank AL Habib Limited (BAHL), and TRG Pakistan Limited (TRG) provided some support, contributing a combined 171 points to the benchmark."
Topline said 1,014 million shares were traded, with overall turnover reaching Rs36.7 billion. K-Electric (KEL) led the volume charts with 94.5 million shares changing hands.
