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Bearish momentum dominated the Pakistan Stock Exchange (PSX) on Monday as shares declined by more than 400 points following the International Monetary Fund (IMF) visit.
Shortly after the opening bell, the benchmark KSE-100 index continued to trade sideways until 10:30, the KSE-100 then continued a downward trajectory, shedding 416.91 points, 0.55 per cent, to stand at 74,925.43 from the previous 75,342.34 at 12pm.
Yousuf M. Farooq, director of research at Chase Securities, said: “The market is down on media reports of a possible electricity price hike along with additional taxation measures.”
However, according to Farooq, “The market has also seen a very large rally and some consolidation is normal.
“All eyes are now on the next monetary policy, the budget and terms and adjustments for the next IMF programme,” he added.
Awais Ashraf, director of research at Akseer Research, attributed the bearish momentum to investors being worried “about the outcome of ongoing negotiations between the government and the IMF team regarding the new programme”.
He also said that investors were worried about the geopolitical atmosphere after the death of the Iranian President Ebrahim Raisi.
Earlier today, it was reported by the Iranian officials and state media that Raisi — a hardliner long seen as a potential successor to Supreme Leader Ayatollah Ali Khamenei — was killed in a helicopter crash in mountainous terrain near the Azerbaijan border.
An Iranian official said that the helicopter carrying Raisi and Foreign Minister Hossein Amirabdollahian was completely burned in the crash on Sunday.
Regarding the IMF conditions, Ashraf highlighted: “Key concerns include the IMF’s demands for significant tax revenue increases, spending cuts, market-based exchange rate determination, and a tight monetary policy.”
More to follow