The Pakistan Stock Exchange (PSX) closed sharply lower on Monday as heavy profit-taking dragged the KSE-100 index down by 1,237.67 points, or 0.73%, to settle at 167,752.40.

The sell-off came amid investor caution following reports that the International Monetary Fund (IMF) raised concerns over discrepancies in trade data reported by Pakistan Single Window (PSW) and Pakistan Revenue Automation Limited (PRAL), putting recent macroeconomic progress under scrutiny.

Analysts termed the phase as a temporary pause and expected  a renewed investor confidence to reurn soon.

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Market experts attributed the drop to a combination of domestic and geopolitical factors. M. Waqas Ghani, Head of Equity Research at JS Global, said stocks came under pressure due to a widening trade deficit and IMF reservations on select policy items, though he expects sentiment to improve once the next IMF disbursement arrives.

Mohammed Awais Ashraf, Director Research at AKD Securities, noted investor caution over the reported trade data gaps but added that SBP data shows no cause for concern, reflecting the actual flow of dollars in and out of the country.

Trading details

Overall volumes decreased to 1.27 billion shares from 1.57 billion in the previous session, with a total stock value of Rs60.5 billion. Stocks of 487 companies were traded, of which 108 closed higher, 348 declined, and 31 remained unchanged. The Bank of Punjab led trading volumes with 131.4 million shares, rising Rs0.96 to Rs34.46.

Equity trader Ahmed Sheraz highlighted heightened volatility, driven by geopolitical tensions with India and domestic uncertainty due to Pakistan’s partial non-compliance with IMF targets. He added that the IMF has requested clarification on an $11 billion discrepancy in trade data reported by two government entities over the past two fiscal years, raising concerns over the credibility of official financial statistics.