ISLAMABAD (PEN) : The Pakistan Stock Exchange (PSX) opened Thursday’s trading session in deep red as escalating regional tensions and a downgraded economic outlook from the International Monetary Fund (IMF) triggered widespread panic among investors.
Market Plunges Amid Investor Uncertainty
The benchmark KSE-100 index dropped sharply, shedding over 2,500 points and settling around 114,661, as investors reacted swiftly to the deteriorating geopolitical climate and revised economic forecasts.
Key stocks from heavyweight sectors—including United Bank Limited (UBL), Hub Power Company (HUBC), Habib Metropolitan Bank (HMB), Mari Petroleum (MARI), and Engro Corporation (ENGROH)—witnessed intense sell-offs.
“This reversal in sentiment can largely be attributed to escalating regional geopolitical tensions, which prompted investors to adopt a cautious stance and lock in recent gains,” stated Topline Securities in its post-market analysis.
At the close of Wednesday’s session, the index had already lost 1,204.21 points, finishing at 117,226.15, signaling mounting investor apprehension throughout the week.
IMF Cuts Pakistan’s Growth Outlook
The market downturn was further exacerbated by the IMF’s latest World Economic Outlook, which revised Pakistan’s GDP growth forecast for FY2025 down from 3% to 2.6%, citing global trade instability and domestic macroeconomic vulnerabilities.
The downward revision comes amid broader global uncertainty, particularly following reciprocal tariffs initiated by U.S. President Donald Trump, which impacted several countries including Pakistan.
In addition, the IMF also lowered projections for FY2025-26, indicating ongoing challenges for Pakistan’s economic trajectory.
Despite the gloomy growth forecast, the IMF offered a somewhat positive adjustment to Pakistan’s current account deficit, reducing it from a previous estimate of 1% of GDP to just 0.1%—translating from $3.7 billion down to $400 million.
Looking ahead to the next fiscal year, the Fund projects a 0.4% current account deficit, suggesting a relatively stable external position, even as growth remains subdued.
