The Pakistan Stock Exchange faced a notable setback, plummeting over 2,000 points, largely attributed to the looming uncertainty surrounding the forthcoming budget. On Friday, the KSE-100 Index, a pivotal gauge of market performance, dipped below 72,000 points, underscoring a palpable unease among investors.
The trading session commenced on a bearish note, witnessing the index hitting a nadir of 71,781.96. Despite a modest rebound, it concluded around 72,775 points. This abrupt downturn is ascribed to apprehensions regarding the budget proposals for the fiscal year 2024-2025, exacerbating volatility sentiments among market participants.
Initially slated for June 10, the budget presentation has been rescheduled, with the Pakistan Economic Survey now slated for June 11 and the budget unveiling anticipated on June 12. This delay has further amplified market jitters, leaving investors in limbo regarding the final budgetary specifics.
A primary concern revolves around the potential abolition of tax exemptions, purportedly under consideration due to pressure from the International Monetary Fund (IMF). If enacted, these revisions could encompass levying sales tax on agricultural essentials such as tractors and pesticides, potentially leading to escalated prices for these indispensable commodities.
While these measures align with the government’s endeavors to meet IMF stipulations, they concurrently raise apprehensions regarding their ramifications across diverse sectors and the broader economy.
Experts opine that this prevailing uncertainty, coupled with the specter of tax reforms, constitutes the chief catalysts driving stock market volatility. Stakeholders are vigilantly monitoring developments, cognizant that the ultimate budgetary determinations will wield substantial influence over market equilibrium and economic trajectories in the forthcoming fiscal period.