KARACHI: The Pakistan Stock Exchange witnessed a downfall on Wednesday, with the KSE-100 index dropping more than 1,200 points in intra-day trade as the possibility of sanctions from the United States destroyed market confidence.
On Tuesday, a group of prominent US senators introduced legislation in the US Senate to impose sanctions on the Afghan Taliban, which may potentially stretch to Pakistan.
According to Express Tribune “the KSE-100 index was trading at 44,316.27 points at 12:33 PM, down 958.66 points or 2.12 percent”.
Furthermore, there was no relief for the rupee, which surpassed the Rs170 level against the US dollar in the interbank market and traded at approximately Rs172 per dollar in the open market.
Express Tribune mentioned that according to Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company, the drop was caused by geopolitical worries and the prospect of US sanctions against Pakistan.
‘Pakistan’s federal ministers have denounced the bill, which was introduced in the US Senate on Tuesday, he further added. He believes that a drop in the value of the rupee had little to no effect on the market’s trajectory.
According to Alpha Beta Core CEO Khurram Schehzad, geopolitical concerns, particularly as the International Monetary Fund (IMF) prepares to evaluate Pakistan’s economy, pounded the KSE-100 index and pulled it down.
He said that US remarks had the ability to affect market direction as well as the impending IMF assessment of Pakistan for the delivery of the sixth tranche.
He further stated, “In addition, investors’ panic over the drop in rupee against the US dollar is also being reflected through the plunge in the market.”
KSE-100 index is facing a decline as the month started with 47,488.28 points while currently as of 28th September the market trades at the value of 44,314.24 points.