PSX Experiences Profit-Taking After Initial Gains

The Pakistan Stock Exchange (PSX) witnessed profit-taking activities following an initial surge, resulting in the benchmark KSE-100 Index shedding over 160 points on Monday.

Trading began positively, driving the index to an intra-day peak of 120,285.54.

As of 12:10 PM, the KSE-100 Index stood at 119,484.69, reflecting a decrease of 164.45 points, equivalent to a 0.14% decline.

IMF Revises Pakistan’s GDP Growth Downward

The International Monetary Fund (IMF) has adjusted its GDP growth forecast for Pakistan downwards to 2.6% for the current fiscal year 2024-25. This revision, detailed in their recent report, is lower than the October projection of 3.2% and is attributed to subdued economic activity in the first half (H1) of the year coupled with widespread global uncertainties.

Previous Week’s Market Performance

Last week, the PSX demonstrated a robust recovery, achieving its most significant week-on-week (WoW) gain in the last five years. This surge was primarily fueled by the announcement of a ceasefire agreement between Pakistan and India, which triggered a substantial market rally.

The KSE-100 Index soared by 12,474 points, marking an 11.6% WoW increase, to close at 119,649 points, a considerable rise from the previous week’s closing of 107,174.64 points.

Global Market Overview

Across the globe, Asian shares experienced a downturn on Monday. This decline coincided with mixed economic data from China, which indicated that the domestic economy is facing challenges even as recently imposed US tariffs begin to impact export activities. Furthermore, the White House has continued to exert pressure on trade partners.

Wall Street share futures also declined alongside the dollar, while Treasury yields increased. These movements reflect growing concerns regarding the inconsistency of US economic policies, a sentiment reinforced by Moody’s recent downgrade of the country’s credit rating.

There’s increasing apprehension over the United States’ $36 trillion in debt, especially as Republicans aim to pass extensive tax cuts that could potentially add an estimated $3 trillion to $5 trillion to the national debt over the coming decade.

US Treasury Secretary Scott Bessent addressed the downgrade in television interviews on Sunday, downplaying its significance while also cautioning trade partners that they would face maximum tariffs if they do not negotiate in “good faith.”

Bessent is scheduled to attend a G7 meeting this week to continue discussions, while US Vice President JD Vance and European Commission President Ursula von der Leyen convened on Sunday to discuss trade matters.

The ongoing tariff war has negatively impacted consumer confidence, and analysts will be closely monitoring earnings reports from Home Depot and Target this week for insights into current spending patterns.

In the broader markets, MSCI’s index of Asia-Pacific shares excluding Japan fell by 0.2%, with Japan’s Nikkei declining by 0.6%.

Chinese blue chips saw a decrease of 0.4%, as retail sales figures for April fell short of expectations, while industrial output experienced a slowdown, albeit less severe than anticipated.

This information reflects an intra-day market update.