Pakistan Stock Market Crash: KSE-100 Tanks 1,700 Points Amid Confusion Over Election Result

Pakistan Election Results: Analysts attribute the plummeting KSE-100 index to investor apprehension, as many are opting to sell rather than buy shares over the uncertain post-election landscape

As election results slowly trickle in, the PSX website reported a dramatic drop of 2,278 points shortly after trading commenced. ( Image Source :Getty )

The Pakistan Stock Exchange witnessed a sharp decline on Friday, with the benchmark KSE-100 index plummeting by 1,700 points. The downturn comes amid widespread confusion surrounding the outcome of the general elections in Pakistan. Authorities in Pakistan have been slow to announce the election results, contributing to the prevailing uncertainty. Surprisingly, preliminary results indicate that disqualified and inprisoned former Prime Minister Imran Khan's Pakistan Tehreek-e-Insaf (PTI) party has thrown its support behind independent candidates who are leading in the polls.

Analysts attribute the plummeting KSE-100 index to investor apprehension, as many are opting to sell rather than buy shares over the uncertain post-election landscape.

As of latest update, KSE-100 is trading at 63,031.46, down by 1,165.16 points.

First National Equity's CEO Ali Malik said the market was expecting a politically stable government after the general elections. "However, it now seems that there are a lot of independents which could form the next government. The investors will be clear when the results are clear," he said.

Malik added that there was a lot of confusion among investors at the moment, who foresaw political instability with the formation of a government comprising independent candidates.

On the other hand, Hammad Zafar, a prominent financial analyst at Topline Securities, commented on the situation, stating, "No one knows what is going to happen and who will form the next government, so it is understandable how investors are reacting today."

As election results slowly trickle in, the PSX website reported a dramatic drop of 2,278 points shortly after trading commenced. Although the index recovered slightly, it still recorded a significant loss of 1,720.27 points, or 2.68 percent, standing at 62,423.60 points by noon, compared to the previous close of 64,143.87 points.

Zafar Paracha, the head of the Pakistan Forex Association, noted the disparity between market expectations and early election outcomes, stating, "Because of all the talk before elections, the market is expecting a PML-N government, but the early results show people have different ideas."

Echoing concerns for stability, another senior analyst emphasised the investor's desire for a government formation to quell political uncertainty. "I think once the results are clear, the market will go up again. Right now, everything happening is temporary," the analyst remarked, expressing optimism for a rebound in market confidence post-election clarity.