The continuation of the IMF program leads to implementing economic reforms and previous initiatives, particularly fiscal and institutional reforms that may be favourable to economic growth. The IMF’s economic reforms would be beneficial to the stock market in general. Improvements in the current account can boost import appetite in a high-inflation environment when commodity prices are highest.

Due to the rerating of the currency, which attracts foreign investment and stabilizes imported commodities and raw material prices, the stock market has been driven by a strong balance of payments scenario. Electricity-intensive sectors, on the other hand, may bear the brunt of a big increase in power tariff. At the same time, leveraged companies may be hurt by a quick upward reversal in interest rates.

Courtesy – ‘Spectrum Research’