PSX drops more than 900 points as next year's federal budget approaches

The Pakistan Stock Exchange (PSX) took the plunge of more than 900 points in the KSE-100 index benchmark.

During the intraday trading on Tuesday, the PSX dipped nearly 1.22%, closing at 74,666.65 points.

The PSX plummeted a total of 1,212 points from its intraday high of 75,878.48 points yesterday.

Earlier today, International Packaging Films Limited (IPAK) began public trading on the exchange, allowing shareholders to buy and sell shares on the open market.

IPAK had previously raised equity financing worth Rs1.76 billion by selling 70.10 million shares at Rs25.20 per share last month. The book-building phase of the initial public offering (IPO) generated significant interest from investors, resulting in oversubscription of the issue by a factor of 1.73 in terms of value.

Read PSX climbs on better economic prospects

The strike price of Rs25.20 per share was determined during this phase, according to a press statement released by PSX.

On June 2, the market underwent some correction and concluded the outgoing week with a marginal decline of over 100 points.

The decline occurred as the upcoming budget undermined investor interest due to potential changes, such as an increase in the sales tax rate and a slash to income tax slabs for the salaried class, which could be implemented to collect more taxes.

Despite the finance ministry's projections of a sharp decline in inflation and a stable Pakistani rupee, which offered some support to the market, investors seemingly remained cautious.

Last week, the exchange made a handsome recovery after enduring losses earlier in the week as the KSE-100 index surged 1,000 points over expectations of a marked fall in inflation as well as the government’s development spending and growth projections for the upcoming year.