Shares at the Pakistan Stock Exchange (PSX) fell by more than 500 points on Thursday, with analysts attributing it to delays in the completion of the International Monetary Fund’s (IMF) ninth review and rising political uncertainty.

The benchmark KSE-100 index closed at 41,179.76 points, down 557.86 points or 1.34 per cent.

The index had started falling sharply soon after trading opened, reaching an intraday low of 627.67 points around 10:20am. The index recovered a bit afterwards before falling again.

Head of Equity at Intermarket Securities Raza Jafri said market sentiment was weak on apprehensions that the release of the IMF tranche could possibly be delayed till next year.

Pakistan entered a $6 billion IMF programme in 2019, which was increased to $7bn earlier this year. The programme’s ninth review is currently pending with remote talks being held between IMF officials and the government for the release of $1.18bn.

Pakistan and IMF had a round of engagement on November 18 but could not finalise a schedule for formal talks on the overdue ninth review.

The talks, originally due in the last week of October, were rescheduled to Nov 3 and then kept on facing delays following gaps in estimates by the two sides.

Jafri added, “Valuations are certainly cheap but there could be residual pressure from redemptions today, with tail-end flows shifting towards fixed income.”

Dalal Securities CEO Siddique Dalal said the index fell because of some companies’ redemptions. In addition, public confidence was eroding and people were exhausted due to which buying had stopped, he said.

Meanwhile, First National Equities Limited Director Amir Shehzad said the primary reason for the slump was political uncertainty.

“There are a few reasons [for the fall]. One is [PTI Chairman] Imran Khan’s statement that he will announce on the 17th when he plans to dissolve the [Punjab and Khyber Pakhtunkhwa] assemblies. Consequently, there is a lot of political uncertainty due to which there is immense pressure on the market.

“Secondly, the issues with the IMF have not been resolved yet,” he said, adding that talks of default were also affecting market sentiment.

The PTI plans to conclude its rallies under the “election karao, mulk bachao (hold elections, save the country)” campaign by Friday, and on Saturday hold a ‘large’ public gathering in Lahore where party chief Imran will announce his ‘final’ plan to dissolve the two provincial assemblies his party heads.