PSX Faces Pressure as KSE-100 Drops Nearly 1,500 Points

The Pakistan Stock Exchange (PSX) faced bearish pressure on Tuesday, with the KSE-100 index dropping by almost 1,500 points. The index lost 1,489.96 points, or 1.31%, closing at 112,030.36 from the previous close of 113,520.32.

Market Declines Over Concerns About SOE Profit Use

Yousuf M. Farooq, Director of Research at Chase Securities, said the market opened under stress after the petroleum minister's recent remarks. The minister stated that Rs82 billion from state-owned enterprises’ (SOEs) profits might be used to offset rising gas costs. This created investor concerns about the government returning to old practices of using SOEs to manage public pressure. Farooq said such policies might not be legally feasible. He also noted that the market appeared to be correcting itself after a strong rally from October to December. However, the petroleum minister’s comments intensified investor caution.

US Aid Suspension Raises Questions

Awais Ashraf, Director of Research at AKD Securities, highlighted another issue: the United States recently suspended foreign aid to Pakistan under its "America First" policy. Although this policy affects multiple countries, Ashraf emphasized it would not significantly impact Pakistan’s balance of payments. Unlike before, US grants now make up a small portion of external funding. For FY25, Pakistan budgeted $21 million in US grants but received $38.3 million during the first five months of the fiscal year. Ashraf clarified that no bilateral loans from the US were included in FY25 plans.

Gas Tariff Hike Adds to Market Woes

Mohammed Sohail, CEO of Topline Securities, linked the bearish trend to January’s rollover and poor corporate results. Political uncertainty and increased gas tariffs added further pressure. The Economic Coordination Committee (ECC) raised gas tariffs by 17% for captive power plants, drawing criticism from export-dependent sectors like textiles. Industry players argued that this decision would reduce Pakistan’s competitiveness in regional and global markets. by pakishnews.com