Shares at the Pakistan Stock Exchange (PSX) reversed major gains on Monday as the KSE-100 index shed more than 2,000 points on International Monetary Fund (IMF) concerns over electricity tariffs.

The benchmark KSE-100 index shed 2,002.55 points, or 1.69 per cent, to stand 116,439.62 from the last close of 118,442.17 points.

Topline Securities, a brokerage firm in Karachi, noted that the market faced downward pressure due to IMF “concerns over the lack of adjustments to electricity tariffs and no reduction in property taxes, as reported in the news”.

Earlier, it was widely reported in the media through official leaks that the prime minister would announce a Rs8 per unit reduction in electricity rates in his speech to the nation on March 23. The prime minister, however, did not announce any such relief package in his Pakistan Day speech.

The substantial reduction in electricity tariffs, promised by the government, could not get past the Fund, which is currently holding back a staff-level agreement (SLA) on the first biannual review of the $7 billion Extended Fund Facility (EFF).

“Additionally, the proposed increase in royalty for cement manufacturers in KPK contributed to the negative sentiment,” Topline Securities added.

The decline, according to the firm, was primarily driven by OGDC, ENGRO, FFC, PPL, and MARI, which exerted downward pressure — pulling the index down by 811 points.

“Overall, 311 million shares were traded, with a turnover of Rs20bn,” it added, highlighting that PAEL topped the volume chart with 28 million shares.

Last week, the index had continued its northward journey for the sixth week, with market sentiment supported by expectations of a SLA between Pakistan and IMF following the conclusion of the first review, which will be a road to disbursement of the second tranche of $1.1bn.

The IMF had shared a draft of the Memorandum of Economic and Financial Policies (MEFP ) with the government, signalling progress. Furthermore, the potential resolution of power circular debt fuelled the positive sentiment.

The Fund has given a nod to the government to recalibrate its tax collection target for FY25 to Rs12.35 trillion from Rs12.97tr.

Meanwhile, the Large-Scale Manufacturing contracted 1.2pc year-on-year in January.

In recent weeks, the country faced a new wave of terrorist attacks, mainly in Khyber Pakhtunkhwa and Balochistan, which is shaking foreign investors’ confidence and well reflected in the 45pc year-on-year plunge in Foreign Direct Investment (FDI) to $95 million in February.

The major economic indicators showed improvement, but the country is still not out of wood, as the LSM sector remained negative in the first seven months of FY25 despite a sharp reduction in the State Bank of Pakistan’s policy rate to 12pc from an unprecedented 22pc in June 2024.