PSX slides 365 pts amid investor concerns over IMF conditions

KARACHI: The Pakistan Stock Exchange (PSX) closed lower today, reflecting investor concerns over the International Monetary Fund’s (IMF) stringent conditions.

The IMF’s requirements include ending energy subsidies, closely monitoring government spending, closing state-owned enterprises (SOEs), and implementing structural tax reforms, all of which are expected to raise inflation in the fiscal year 2025 (FY25).

The PSX’s current index stands at 81,292.13, marking a decline of 365.83 points or 0.45%. The market saw a high of 81,842.74 and a low of 81,183.50, with a trading volume of 339 million shares valued at Rs 12.9 billion across 190,876 trades.

Ahsan Mehanti, CEO of Arif Habib Commodities, noted that the market’s bearish close was influenced by ongoing political noise, delays in the privatisation of SOEs, and pressure from the rollover of future contracts. These factors, combined with the IMF’s conditions, have created a challenging environment for investors.

The trading session began with positive momentum but remained volatile throughout. The session ended with a large red candle, indicating a substantial decline from the opening level. Over the past ten trading sessions, the market has seen an equal number of green and red candles, reflecting mixed investor sentiment, according to AKD Research.

Technical analysis shows that the Relative Strength Index (RSI) is currently at 65.25, suggesting that the market is neither overbought nor oversold. The recent data of PSX indicates that it may find initial support around 81,500 points, according to ADK Research. If this support level is breached, further declines could push the index towards 81,200 and 80,800 points. Conversely, resistance is expected near 82,000 points, with potential upward movement towards 82,500 and 82,800 points.

The brokerage houses advise investors to consider buying positions with defined risk below the support zone, as the market navigates through these turbulent conditions. The coming days will be crucial in determining whether the PSX can stabilize or if further declines are on the horizon.