Pakistan stocks decline as IMF refuses reduction in property taxes

Pakistan's stock market closed lower on Monday, as mounting concerns over International Monetary Fund (IMF) policy disagreements and proposed domestic tax adjustments weighed on investor sentiment.

An analyst at Topline Securities attributed the market's downturn to apprehensions over the lack of adjustments to electricity tariffs and the absence of reductions in property taxes, as reported earlier.

“Additionally, the proposed increase in royalty fees for cement manufacturers in Khyber Pakhtunkhwa (KPK) added to the prevailing negative sentiment,” the analyst said.

Further dampening investor confidence, the IMF rejected the Federal Board of Revenue's (FBR) request to lower transaction taxes for the property sector. This decision contradicted earlier assertions by senior officials who claimed that the Washington-based lender had, in principle, agreed to a 2% reduction in withholding tax for property buyers beginning April 1, 2025, pending formal approval. However, the IMF has since clarified that it has not committed to such a tax cut.

Key market players, including Oil and Gas Development Company, ENGRO, Fauji Fertilizer, Pakistan Petroleum, and Mari Energies, led the decline, collectively dragging the index down by 811 points.

KSE-100 index shed 1.69% or 2,002.56 points to close at 116,439.62 points.

Currency

US dollar steadied against PKR in the inter-bank market. Pakistani currency lost 11 paisas to close at 280.37. In the open market USD was trading at PKR 282.

Indian Stocks

The Indian stock market rallied sharply on Monday, signaling a potential turnaround after months of steep declines that erased more than $1 trillion in market value.

Analysts said the recent market correction has made valuations of large-cap stocks more attractive, prompting investors to engage in value buying of high-quality stocks that had been battered during the selloff. The renewed optimism has fueled speculation that Indian equities may have entered a recovery phase.

Market participants highlighted the rally as a sign of strengthening investor confidence, driven by improved sentiment and opportunities in undervalued sectors.

Investors remain optimistic as the nascent recovery gathers pace, offering hope of sustained momentum in the coming weeks.

BSE-100 index gained 1.31% or 319.93 points to close at 24,760.42 points.

DFM General Index shed 0.37% or 19.11 points to close at 5,080.69 points.

Crude Oil

Crude oil prices remained rangebound at the start of this week as traders anticipate news on a possible end to the Ukraine war, which could increase Russian crude supply.

Despite low prices, OPEC+ plans to reduce output cuts in April.

Brent crude prices increased by 0.37% to $72.43 per barrel.

Gold Prices

Gold prices remained steady on Monday as traders awaited new developments after a recent surge to record highs, driven by geopolitical tensions and expectations of U.S. rate cuts.

Prices may rise further if market concerns over tariff-related growth risks persist, though progress on a Russia-Ukraine ceasefire could limit gains.

International gold prices declined 0.46% to close at $ 3,027.24 per ounce. In the local market, gold prices stand at PKR 318,600 per tola.