The Pakistan Stock Market (PSX) saw a significant downturn on Friday morning as the benchmark KSE-100 Index experienced its largest fall in months, dropping over 2,000 points in early trading. This sharp decline was driven by rumors of high taxes being imposed on the capital markets in the upcoming budget.
Despite the initial drop, the index managed to recover somewhat, rising to 72,572.16 points by 10:30 am, a decline of 1.75%, or 1,290.77 points.
The market’s volatility was fueled by a range of economic concerns, including the upcoming 2024-25 budget and the State Bank of Pakistan’s (SBP) impending monetary policy announcement. These uncertainties led to anxiety among investors, prompting them to offload shares.
Experts attributed the panic to speculations about increased Capital Gains Tax (CGT) and dividend tax in the forthcoming budget. Rumors about the potential imposition of a General Sales Tax (GST) or an increase in the Petroleum Development Levy (PDL) further exacerbated investor worries.
However, analysts suggested that a potential decline in the key policy rate in the upcoming Monetary Policy Committee (MPC) meeting could improve market conditions.
The PSX has been on a downward trend throughout the week. On Thursday, the market opened positively but ended in the negative zone, with the KSE-100 index closing at 73,862 points, a decrease of 356 points. This followed a loss of 447 points the previous day.
