On Tuesday, the Pakistan Stock Exchange (PSX) experienced a significant decline, with shares dropping over 600 points during intraday trading.
The benchmark KSE-100 index fell by 622.46 points, or 0.76%, settling at 81,214.45 points, down from the previous close of 81,850.50 points by 12:22 PM.
The EFG Hermes Pakistan CEO, Raza Jafri, attributed the market’s downturn to disappointing results from state-owned oil exploration companies. He also noted that independent power producers (IPPs) were under pressure due to reports of the government planning to revise their contracts.
Earlier this month, the government announced efforts to renegotiate contracts with IPPs to address “unsustainable” electricity tariffs. Power Minister Awais Leghari indicated that while good news regarding the negotiations would be forthcoming, significant relief in electricity prices would not be immediate.
Analysts also linked the market’s decline to uncertainties surrounding the government’s stance on IPP capacity payments and ongoing political instability following a Supreme Court verdict supporting the PTI’s bid for reserved seats. Investors are advised to consider high-dividend stocks and companies poised to benefit from structural reforms.
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