Stocks Face Pressure as FY24 Budget Looms
Despite the efforts of bullish investors to keep the KSE-100 index above 42,000, the Pakistan Stock Exchange (PSX) experienced significant selling pressure on Thursday.
Investors remained cautious in anticipation of the upcoming budget announcement on Friday, leading to profit-taking in sectors like banking and technology, which ultimately caused a decline in the index.
Additionally, concerns and expectations surrounding new budget proposals deterred investors from taking substantial positions.
Although the day started on a positive note, the KSE-100 soon declined as investors chose to secure their profits. As a result, the index closed in the red.
“Stocks across the board fell due to uncertainty surrounding the pre-budget period, as the government strives for an IMF-friendly budget ahead of the IMF board review later this month,” commented Ahsan Mehanti, CEO of Arif Habib Commodities.
At the end of the trading session, the benchmark KSE-100 index settled at 41,686.46, recording a decrease of 456.25 points, or 1.08%.
Foreign Exchange Reserves Decrease to $3.9b
Data released on Thursday revealed that the foreign exchange reserves held by the State Bank of Pakistan (SBP) declined by 4.3% on a weekly basis, reaching $3.9 billion.
As of June 2, 2023, the SBP’s foreign currency reserves stood at $3,912.2 million, indicating a decrease of $179 million compared to $4,090.7 million on May 26. The decline in reserves can be attributed to external debt payments.
Considering the overall liquid foreign currency reserves, including those held by banks other than the SBP, the total amounted to $9,334.8 million. Among these, the net reserves held by banks were $5,422.6 million.
Key Points
The key points of the article are as follows:
- The KSE-100 index closed at 41,686.46, down 456.25 points, or 1.08%.
- The decline was attributed to profit-taking by investors ahead of the budget announcement on Friday.
- Investors were also concerned about the decline in foreign exchange reserves, which fell by $179 million to $3.9 billion in the week ending June 2.
- The decline in foreign exchange reserves was attributed to external debt payments.
Published in PakWeb, June 9th, 2023.
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