The bearish feeling continued on the exchange floor in the Pakistan bag on Thursday with actions that fell more than 1,000 points, one day after India announced a series of diplomatic measures addressed to Pakistan after a deadly in busy assumption that resulted in the death of more than two dozen tourists.
The KSE-100 reference index decreased by 1,086.51, or 0.93 percent, to stop at 116,139.63 from the previous closure at 11:13 am
Yousuf M. Farooq, research director of Chase Securities, said: “The market opened more amid fears of increasing tensions between Pakistan and India.
“However, positive corporate gains have supported a partial recovery,” he said.
“In the future, the feeling of investors will depend on the trajectory of relations between India-Pakistan, the next corporate results and the decision of the monetary policy that is expected in early May.”
In macroeconomic indicators, he stressed that inflation was in a low record, with the monthly current account to a record record, and the real effective exchange rate (reer) was “in a 101st stable.”
Sana Tawfik, Arifib Limited research head, attributed the negative impulse mainly to tensions between India and Pakistan.
In other factors, he pointed out that the International Monetary Fund (IMF) had also reduced the country’s economic growth objective.
“However, the main reason behind the impulse remains tensions between India and Pakistan, although, in the economic front, our inflation numbers are expected to be low,” he said, adding that Fitch had also highlighted the concern that the rupe can pass to RS285 against the US dollar in June and probably fall to RS295 for the end of the fiscal year.
“However, it was more or less expected: we hope it will reach RS283,” he said.
In a great escalation of regional geopolitical tensions, India suspended the swing of the Indo waters (IWT) with Pakistan with an immediate effect following an attack on the pahalgama of Cashmira busy occupied a day ago. Pakistan, in response, has called a National Security Committee meeting to deliberate the resulting situation.
The attack took place in Pahalgam, a tourist access point in the picturesque Muslim majority territory of the majority that caused thousands of visitors every summer, and at least 26 people died, all men, while the police said that another 17 people were injured, when the gunmen opened fire against visitors in the popular destination.
Shahbaz Ashraf, Investment Director of Frim Ventures, said that the market had recovered slightly from the early 2PC fall “amid augmented tensions” after the pahalgama attack.
“Investors are still cautious, weighing potential additional responses from India and Pakistan,” he said.
However, he observed that the macroeconomic context was “much more resistant” now than in 2019 during the pulwama attack, which had led to an acute decrease in 5 pieces.
“Back in fiscal year 2019, Pakistan faced high inflation, a broad current account deficit and fiscal stress,” he said. “On the contrary, the fiscal year2025 is marked by relative stability and the strongest foundations.”
Given this backdrop, he said that any short -term drop from 2pc to 4pc could “offer a convincing purchase opportunity.”
“In my opinion, such setbacks should be seen as accumulation windows for long -term investors,” he said.
Mohammed Sohail, executive director of Topline Securities, echoed the same feelings. He said that geopolitical tensions continued to affect market feelings.
Previously, the International Monetary Fund (IMF) also reduced Pakistan’s economic growth forecast at 2.6pc, which generated concerns about its economic perspective.
In its last update, the IMF reduced growth estimation at 2.6pc for the current fiscal year and 3.6 for the next fiscal year. He also placed the estimate of inflation in 5.1pc and 7.7pc for current and fiscal years in the next.
The increase in commercial tariffs on Pakistani products could have a devastating impact on Pakistan’s important exports and serves as a call for diversification, according to a state group of experts.
Yesterday, the index fell below the 118,000 barriers for renewed concerns about Pakistan’s economic perspectives and the increase in geopolitical tensions caused a panic wave due to cautious investors.
Forex from India, interest rates merchants become cautious after the attack
The merchants of currencies and interest rates of India have become cautious for fear of a possible climbing in the tensions between New Delhi and Islamabad after the attack.
A day after the attack, the Indian rupee registered its worst performance in two weeks. The currency continued to weaken on Thursday, falling to 85,6625 against the US dollar.
The concerns about New Delhi’s response to attack are leading some concerns, according to three bankers.
The attack has played a role in the weakness of the rupee, along with the recovery in the dollar index, a senior treasure official in a bank said.
However, it is difficult to quantify the exact impact of each factor on the decline of the rupee, said the banker, who asked not to be identified since he is not allowed to speak with the media.
Dollar/Indian Rupee front premiums increased along with the decrease in Indian rupees. Indian bonds fell and interest rates exchanges hardened.
While the size of the movements “is not large to any extent,” reflects the uncertainty about what could be developed below, said a currency of currencies and exchange in a bank.
The index exchange rate during the 5 -year night of India has increased 12 basic points since the minimum on Wednesday, while the 1 year OIS has increased by approximately half of that amount.
Meanwhile, the 10 -year India reference performance increased to 6.36pc on Wednesday and remained close to that level on Thursday.
Alok Sharma, Treasury Chief at ICBC, anticipates that the 10 -year yield will remain above 6.30 percent due to caution after the attack. This feeling is promoting “more paid interests” in OIS and cousins forward, he said.
The market was “reacting to uncertainty, not the foundations,” said Manish Bhargava, CEO of Straits Investment Management.
“The way forward depends on how the situation develops.”
Additional information taken from Reuters.
