Pakistan stocks drop on eve of MSCI inclusion

On its last day of trading before being upgraded to emerging market status, Pakistan experienced a frenzy of trading — and an unexpected fall in prices.

Pakistan’s stock market dropped on Wednesday, defying expectations of a market rally the day before the country was due to be included in the MSCI Emerging Markets Index. The market closed down 1.67% on the day, but late selling continued in the aftermarket.

The fall came after an almost 40% rise over the last 12 months, and a 5.82% jump since the start of the year. But the poor performance of the country’s benchmark KSE 100 index still surprised some local market participants, since index tracker funds were scheduled to plough into the market at the eleventh hour to shadow Pakistan's inclusion in the index.

There was...

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