The Pakistan Stock Exchange (PSX) on Monday was dominated by bears that dragged its benchmark KSE-100 index down by nearly 1,000 points, with analysts attributing the losses to “political uncertainty”.

The KSE-100 index lost 1054.58, or 1.68 per cent, to stand at 61,889.16 at 10:51am from the previous close of 62,943.74 points.

On Friday, the index had plunged 1,200 points over the delay in announcing the results of general elections.

Yousuf M. Farooq, director of research at Chase Securities, said that the market opened under pressure due to “unresolved political uncertainty over the weekend”.

Farooq noted that volatility would remain until there was clarity on the political front.

He highlighted that oil exploration companies “experienced pressure” amid rumors of the International Monetary Fund (IMF) discussing the circular debt resolution plan with the next government.

However, on a positive note, he noted that remittances for the month of January had clocked in at $2.4 billion while a current account surplus was also “anticipated”.

“This could alleviate speculative pressure on the rupee and support the market in coming days.” he said.

Awais ashraf, director of research at Akseer Research, said, “The delay in the formation of the government due to lack of lack of clear mandate for one party creates uncertainty among investors”.

“The likelihood of the continuation of the Pakistan Democratic Movement formation raises concerns on initiation of stricter reforms necessary to curtail fiscal deficit,” he said.

Exploration and production companies — such as Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) — experienced the largest decline due to delays in the approval of the circular debt clearance programme from the IMF, he said.

On Friday, stocks had finished the tumultuous three-session election week on a negative note as the “unusual delay” in announcing election results created uncertainty among investors about a smooth return to a stable political government.

As a result, the KSE 100-share index came under renewed selling pressure settling the short week below 63,000. On Friday, the equities fell like a house of cards and the index plunged by 2,300 points intraday as an inordinate delay in election results triggered aggressive selling.

However, the index got some support after the Election Commission of Pakistan announced more results towards the closing of trading and the news of a likely sovereign rating upgrade by Standard and Poor’s (S&P) to “B” from “CCC+” helped the market closed the session with a trimmed loss of 1,200 points.

---

More to follow