Karachi Stock Exchange Crashed Due To Political Uncertainity

The KSE-100 index of the Pakistan Stock Exchange dropped 1,700 points on Friday amid uncertainty regarding the 2024 election results.

Image - A stockbroker responds while observing the market on the electronic board showcasing share prices during a trading session at the Pakistan Stock Exchange in Karachi. Credit - Reuters

On Friday, the KSE-100 index of the Pakistan Stock Exchange dropped by 1,700 points amid uncertainty surrounding the general election results. Pakistani authorities are slow to announce the results, revealing an unexpected lead by independent candidates supported by disqualified and imprisoned ex-Prime Minister Khan's Pakistan Tehreek-e-Insaf (PTI) party. A prominent financial analyst attributed the decline in the KSE-100 index to investors opting to sell rather than buy, given the uncertain post-election scenario.

"The future government remains uncertain, causing understandable concern among investors today," remarked Hammad Zafar of Topline Securities.

As the general election results continued to unfold, the PSX website reported a rapid decline of 2,278 points at the start of trading. Subsequently, there was a partial recovery, with a decrease of 1,720.27 points or 2.68%, settling at 62,423.60 points by noon from the previous close of 64,143.87.

Despite pre-election expectations favoring a PML N government, early results indicate divergent preferences, noted Zafar Paracha, head of the Pakistan Forex Association.

Investors are seeking stability, and an end to political uncertainty, according to another senior analyst. Expressing optimism, the analyst stated, "Once the results are clear, the market is likely to rebound. The current fluctuations are temporary."