The Pakistan Stock Exchange (PSX) faced the impact of a series of major negative economic developments that occurred on Thursday, as the benchmark KSE-100 Index registered a drop of over 750 points during intra-day trading on Friday.
At the time of this report, the KSE-100 Index was hovering around 41,482.16, a fall of 755.75 points or 1.79%. On Thursday, the benchmark index had extended losses and closed 518.13 points or 1.21% lower to settle at 42,237.91 points.
Selling pressure at the PSX comes as Moody’s Investors Service announced that it has downgraded Pakistan’s outlook to negative from stable. It affirmed Government of Pakistan’s B3 local and foreign currency issuer and senior unsecured debt ratings.
Shortly after Moody’s announcement, the federal government said it is increasing petroleum prices by another Rs30 per litre, taking it to its highest level, to meet an International Monetary Fund (IMF) condition for the revival of the Extended Fund Facility (EFF) programme.
Finance Minister Miftah Ismail, while announcing the price hike, said that the increase was necessary for the IMF programme and other subsidies would also be withdrawn in the budget to be announced on June 10, 2022.
He also announced that the federal government has decided to end the tax amnesty scheme announced by former Pakistan Tehreek-e-Insaf (PTI) government. The scheme would not be extended.
Meanwhile, Moody’s cited Pakistan’s heightened external vulnerability risk and uncertainty around the sovereign’s ability to secure additional external financing.