Stocks Take a Hit: PSX KSE-100 Index Declines

The Pakistan Stock Exchange (PSX) experienced a wave of selling pressure today, with the KSE-100 Index shedding 882 points during intraday trading on Wednesday.

As of 11:40 am, the KSE-100 Index was recorded at 117,547.94, reflecting a decrease of 882.41 points, equivalent to a 0.75% drop.

Yesterday, the benchmark index concluded trading on a relatively stable note following a session characterized by range-bound activity.

IMF Adjusts Pakistan’s GDP Growth Forecast Downward

The International Monetary Fund (IMF) has revised its GDP growth forecast for Pakistan downwards by 0.4%, setting the projection at 2.6% for the fiscal year 2025, a reduction from the previous estimate of 3% made in January 2025.

According to the IMF’s recent “World Economic Outlook (WEO) a critical juncture amid policy shifts” report, Pakistan’s GDP is projected to grow at 2.6% in 2025 and 3.6% in 2026.

The IMF’s earlier WEO, released in January 2025, had anticipated a GDP growth rate of 3% for fiscal year 2025 and 4% for 2026.

Fitch Ratings Anticipates Currency Devaluation

Concurrently, Fitch Ratings has projected a gradual devaluation of Pakistan’s currency to mitigate potential strain on the current account as economic activity in the nation increases.

According to Bloomberg, Fitch anticipates “the rupee declining to 285 against the dollar by the close of June and weakening further to 295 by the conclusion of the next fiscal year in 2026,” according to Krisjanis Krustins, Director of Asia Pacific Sovereign Ratings at Fitch.

Global Market Overview

Globally, stock markets in Asia rebounded on Wednesday, buoyed by remarks from President Donald Trump indicating he had no intention of dismissing the Federal Reserve chief and suggesting the possibility of reduced tariffs on Chinese goods.

The dollar saw an increase following Trump’s backtracking on threats to remove Fed Chair Jerome Powell, a move that had previously undermined investor confidence in U.S. assets.

Trump also restated his desire to reach a deal with China that would involve significantly lower tariffs, contingent on Beijing’s willingness to engage in discussions.

Earlier reports quoted Treasury Secretary Scott Bessent expressing optimism about a de-escalation in U.S.-China trade tensions, while noting that negotiations with Beijing had yet to commence and were expected to be challenging.

Chris Weston, head of research at Pepperstone, commented that the market sentiment appeared to be shifting, with a partial reversal of the previous day’s “sell America” trend.

“Markets are becoming ever more conditioned to the President shooting from the hip and then reversing the stance like it was never a big issue.”

Investors responded positively, purchasing previously underperforming stocks, leading to a 2.3% surge in Japan’s Nikkei and a 1.2% increase in South Korea’s main index.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3%.

Wall Street experienced an overnight recovery as S&P 500 futures rose 1.8% and Nasdaq futures climbed 2.0%. This was supported by favorable earnings reports, with Tesla shares rebounding 5% after hours despite missing forecasts.