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PSX nosedives by over 800 points amid political uncertainty

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The Pakistan Stock Exchange (PSX) on Tuesday plunged by over 800 points during intra-day trade amid uncertainty on the political front.

At 11:59am, the benchmark KSE-100 Index dropped by 742 points, or 1.81%, to settle at 40,228 points.

KSE-100 Index at 11:59am. — Screengrab/PSX

However, a few minutes later the drop crossed the 800 mark. The market was hovering at 40,164 points down by 1.97%.

KSE-100 Index at 12:34pm. — Screengrab/PSX
KSE-100 Index at 12:34pm. — Screengrab/PSX

Speaking to Geo.tv, AA Commodities Director Adnan Agar said the stock market is reacting to all “bad political news”.

“Players are looking for political stability before assuming fresh positions in the market,” he said, adding that any positive news on political front or positive development regarding IMF programme will reinstate investors confidence.

Pakistan and the global lender have been holding discussion with Islamabad on the ninth review “productive”. However, differences between both the sides still persist making consensus harder to strike on a staff-level agreement for completion of the 9th review under $7 billion Extended Fund Facility (EFF).

Agar further highlighted that market players are also concerned about the future of the Shehbaz Sharif-led coalition government while taking into account the current political developments.

The federal government has been thrown off guard after Imran Khan announced that he will be dissolving the Punjab and Khyber Pakhtunkhwa assemblies this week.

“Moreover, constant depreciation of rupee against the US dollar is adding fuel to the downtrend,” he said, mentioning that the investors are unhappy with how Finance Minister Ishaq Dar is handling the rupee-dollar parity.

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Pakistan’s gold price increases by an additional Rs. 800 per tola.

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The price of yellow metal in the local market hit Rs247,300 on the first working day of the week, following a rise of Rs800 in a single day.

The cost of ten grams of 24-karat gold increased by Rs686 on Monday, making the current price Rs212,020.

In addition, the cost of 10 grams of 22-karat gold increased significantly, trading at Rs194,351.

These fluctuations are strongly correlated with shifts in the US dollar’s value, demonstrating the tight connection between gold prices and exchange rates. This emphasizes how local gold markets are impacted by variables related to the global economy.

The price of the precious metal dropped $16 on the international market on Monday, hitting $2,348 per ounce.

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A delegation from Pakistan travels to the US to bargain with the IMF for a new loan.

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The Pakistani delegation consists of the Governor of the State Bank of Pakistan, the Secretary of Finance, the Additional Secretary, and other individuals.

The Finance Minister was greeted at the airport by Pakistan’s Ambassador to the United States, Masood Khan, and Embassy staff.

The Finance Minister will meet with representatives of the World Bank and IMF while he is in the US.

The IMF and Pakistan are expected to negotiate next week, according to sources.

Sources claim that Islamabad will apply for a new credit package from the IMF.

The Finance Minister’s itinerary also includes meetings with members of think tanks and the world press.

Last month, Pakistan and the IMF came to a staff-level agreement over the third and final review of the $3 billion stand-by arrangement. Should the board of the global lender approve this deal, Pakistan will get approximately $1.1 billion.

Although a specific date has not been determined, the IMF board is anticipated to evaluate the case in late April, according to a spokeswoman.

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Pakistan’s petrol prices are anticipated to rise.

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The Oil and Gas Regulatory Authority (OGRA) will not disclose the anticipated increase in fuel prices until its work is finished, according to sources.

Prime Minister Shehbaz Sharif will receive the summary of the petrol price, and sources further stated that the new pricing will be revealed following his approval today.

Noteworthy to highlight is that Pakistan was previously ordered by the International Monetary Fund (IMF) to impose an 18% General Sales Tax (GST) on gasoline.

Details indicate that Pakistan was requested by the Monetary Fund to stop reducing sales tax on all goods, including gasoline.

To boost tax revenue, Pakistan’s recently elected government should impose a sales tax on petroleum items in addition to a Rs 60 charge.

High-speed diesel (HSD) was reduced by Rs3.32 per litre on March 31 but petrol prices increased by Rs9.66 per litre by the government.

In contrast to the reduction in the price of high-speed diesel (HSD) to Rs282.24 from Rs278.92, the price of gasoline jumped to Rs289.41 per litre.

The adjustments were brought about by a commensurate increase in the price of gasoline and a decline in the price of HSD on the global market, according to a statement released by the Finance Ministry.

According to the statement, the adjustment was made in accordance with government policy, which transfers pricing differences from the foreign market to the home market.

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