KARACHI – Shares in KSE-100 index on Monday surged by 452.03 points to reach the 42,246.69 mark.
Street analysts were optimistic that the KSE-100 index would surpass 50K or 60K after the IMF deal, but this did not happen. The market has been facing numerous challenges in recent years, including the global pandemic, political instability, flooding, and a geopolitical crisis with the Russian invasion of Ukraine.
According to Intermarket Securities’ Head of Equity Raza Jafri, this upturn was due to the market’s anticipation that the government would soon finalize a much-needed staff-level agreement (SLA) with the International Monetary Fund (IMF).
Salman Naqvi, Head of Research at Aba Ali Habib Securities, concurred with Jafri’s assessment, stating that the KSE-100’s rise was primarily due to the expectation of the SLA being signed in the near future.
However, the risk of default due to an economic slowdown may result in write-downs and higher provisions on the balance sheets of banks. While securing the IMF deal is not an ideal scenario, the market believes it will bring much-needed long-term economic and financial stability to the country, leading to a possible strong rebound if the political scene does not deteriorate any further.
Stock market movements are influenced by a wide range of factors, including economic conditions, political developments, company performance, and global market trends. These factors can be unpredictable and can cause sudden shifts in market sentiment.