Wednesday, June 19, 2024

Pakistan Stock Exchange Crashes by Over 2,000 Points and Falls Below 72,000

The Pakistan Stock Exchange experienced a significant drop of over 2,000 points due to uncertainty surrounding the upcoming budget. On Friday, the KSE-100 Index, a benchmark for the stock market, fell below 72,000 points, highlighting the market’s nervousness.

The trading day began with a bearish trend, and the index reached a low point of 71,781.96. However, it managed to recover slightly, closing around 72,775 points. This sharp decline is attributed to concerns about the fiscal year 2024-2025 budget proposals, which have created a sense of volatility among investors.

Originally, the government planned to present the budget on June 10. However, this has been rescheduled, with the Pakistan Economic Survey now set for June 11 and the budget presentation expected on June 12. This delay has added to the market’s anxiety, as investors are unsure about the final budget details.

One of the major worries is the potential elimination of tax exemptions, which is reportedly being considered due to pressure from the International Monetary Fund (IMF). If implemented, these changes could include imposing sales tax on tractors and pesticides, leading to higher prices for these essential items.

Such measures are part of the government’s efforts to meet IMF requirements, but they also raise concerns about the impact on various sectors and the overall economy.

Experts believe that this uncertainty and the possible tax reforms are the primary reasons for the stock market’s volatility. Investors are closely watching the situation, as the final budget decisions will significantly influence market stability and economic prospects in the coming fiscal year.

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