Shares at PSX lose over 700 points in intraday trading

The Pakistan Stock Exchange (PSX) witnessed bearish day on Tuesday, with shares plummeting over 700 points in intraday trading. 

The benchmark KSE-100 index experienced a decline of 768.80 points or 0.66 percent, closing at 115,486.32 points at 11:04 am. This follows a loss of 1,331.85 points on Monday, when the market closed at 116,255.12.

Director of Research at Chase Securities Yousuf M Farooq attributed the recent market decline to the typical cycles of profit-taking and correction that often follow a significant rally.

Farooq stated that such momentum is normal in the market after a preiod of strong gains, as sometimes investors are cautious to invest due to the increase in commodity prices. 

"Reports of an increase in the gas circular debt and higher tariffs for captive power plants" have been deterring investors from spending for two days.

To eliminate the cost-benefit between grid power and in-house electricity generation, the International Monetary Fund (IMF) has asked the government to impose a substantial levy on gas supplied to the industrial captive power plants.

However, under the $7 billion bailout programme, Pakistan is bound to give at least one of the major structural benchmarks, which includes disconnecting gas supply to CPPs by the end of January.

The market has witnessed a two-day decline, despite briefly surpassing the 118,000 mark yesterday. However, bearish sentiment soon prevailed.

An analyst attributed his market downturn to political uncertainty and the IMF’s strict levy policy on industrial CPPs.