AGL 5.74 Decreased By ▼ -0.09 (-1.54%)
ANL 9.07 Increased By ▲ 0.04 (0.44%)
AVN 78.90 Increased By ▲ 0.10 (0.13%)
BOP 5.17 Increased By ▲ 0.01 (0.19%)
CNERGY 4.72 Increased By ▲ 0.04 (0.85%)
EFERT 81.10 Increased By ▲ 0.55 (0.68%)
EPCL 50.33 Decreased By ▼ -1.38 (-2.67%)
FCCL 13.51 Decreased By ▼ -0.10 (-0.73%)
FFL 5.79 Decreased By ▼ -0.06 (-1.03%)
FLYNG 7.17 Increased By ▲ 0.05 (0.7%)
FNEL 4.80 Decreased By ▼ -0.05 (-1.03%)
GGGL 8.90 No Change ▼ 0.00 (0%)
GGL 15.79 Decreased By ▼ -0.26 (-1.62%)
HUMNL 5.91 Increased By ▲ 0.11 (1.9%)
KEL 2.61 Increased By ▲ 0.01 (0.38%)
LOTCHEM 29.85 Decreased By ▼ -0.16 (-0.53%)
MLCF 24.90 Decreased By ▼ -0.50 (-1.97%)
OGDC 72.14 Decreased By ▼ -0.01 (-0.01%)
PAEL 15.34 Decreased By ▼ -0.15 (-0.97%)
PIBTL 5.11 Increased By ▲ 0.10 (2%)
PRL 16.47 Increased By ▲ 0.07 (0.43%)
SILK 1.09 Decreased By ▼ -0.01 (-0.91%)
TELE 9.59 Decreased By ▼ -0.06 (-0.62%)
TPL 7.33 Increased By ▲ 0.03 (0.41%)
TPLP 19.16 Decreased By ▼ -0.07 (-0.36%)
TREET 21.98 Increased By ▲ 0.03 (0.14%)
TRG 145.20 Increased By ▲ 0.23 (0.16%)
UNITY 16.72 Increased By ▲ 0.10 (0.6%)
WAVES 9.97 Decreased By ▼ -0.03 (-0.3%)
WTL 1.38 Increased By ▲ 0.01 (0.73%)
BR100 4,253 Increased By 23.2 (0.55%)
BR30 15,808 Decreased By -14.2 (-0.09%)
KSE100 42,276 Increased By 205.1 (0.49%)
KSE30 15,625 Increased By 120.4 (0.78%)
Markets

Bloodbath at PSX: KSE-100 closes over 920 points lower amid economic headwinds

  • Index closes at41,314.88 after Moody's downgrade of Pakistan's outlook, other negative developments
Published June 3, 2022
Follow us

The Pakistan Stock Exchange (PSX) faced the impact of a series of major negative economic developments that occurred on Thursday, as the benchmark KSE-100 Index ended the final session of the week over 920 points lower.

Indices slipped lower and lower during the trading session as the benchmark index lost 1,092 points to register an intra-day low of 41,145.35.

At close, the index ended up at 41,314.88, a decline of 923.03 points or 2.19%. On a weekly basis, the benchmark index lost 3.61%.

The market witnessed across the board selling as all sectors reported hefty losses.

"The rise in prices of petroleum products and hike in electricity rates for the next fiscal year all acted as negative triggers for the investors," said Capital Stake in its post-market update.

KSE-100 drops 1.21% amid sharp increase in yields in secondary market

Selling pressure at the PSX comes as Moody's Investors Service announced that it has downgraded Pakistan’s outlook to negative from stable. It affirmed Government of Pakistan's B3 local and foreign currency issuer and senior unsecured debt ratings.

Shortly after Moody's announcement, the federal government said it is increasing petroleum prices by another Rs30 per litre, taking it to its highest level, to meet an International Monetary Fund (IMF) condition for the revival of the Extended Fund Facility (EFF) programme.

From Moody's to Miftah: in case you missed Thursday's developments, here is a rundown

Finance Minister Miftah Ismail, while announcing the price hike, said that the increase was necessary for the IMF programme and other subsidies would also be withdrawn in the budget to be announced on June 10, 2022.

He also announced that the federal government has decided to end the tax amnesty scheme announced by the previous Pakistan Tehreek-e-Insaf (PTI) government. The scheme would not be extended.

Meanwhile, Moody's cited Pakistan's heightened external vulnerability risk and uncertainty around the sovereign's ability to secure additional external financing.

“A lot of developments on the economic front have led to this reaction in the market,” Sana Tawfik, vice-president of research and a senior analyst at Arif Habib Limited (AHL), told Business Recorder.

She said that the petroleum price hike, Moody’s downgrade of Pakistan's outlook and the decline in foreign exchange reserves were all negative developments.

“Inflation is projected to jump up to at least 16% or, in case of a further hike in POL rates, to 18%,” said Tawfik.

She added that the markets would remain under pressure in the upcoming budget week, where the government is expected to announce further removal of subsidies.

“However, the pressure may subside, if the Chinese loan rollover deal is materialised,” she added.

AHL in its latest report said that Moody’s decision of downgrading the outlook to negative would have a “spillover effects on local/foreign currency bond yields by a way that it influences country’s degree risks”.

“This will cause impediments for much needed Foreign Direct Investment (FDI), which recorded an inflow of $1.5 billion (-2% YoY) in 10MFY22. That said, the news of downgrade might not bode well for Foreign Portfolio Investment (FPI),” it said.

Sectors dragging the benchmark KSE 100 index lower included banking (184.11 points), cement (130.35 points) and fertiliser (96.02 points).

Volume on the all-share index increased to 225 million from 157 million on Thursday. The value of shares traded marginally improved to Rs5.99 billion from Rs5.29 billion recorded in the previous session.

K-Electric Limited was the volume leader with 30.06 million shares, followed by Pak Refinery with 21.76 million shares, and Cnergyico PK with 20.27 million shares.

Shares of 335 companies were traded on Friday, of which 61 registered an increase, 262 recorded a fall, and 12 remained unchanged.

Comments

Comments are closed.

Muhmmad Jun 03, 2022 12:55pm
I request you payment
thumb_up Recommended (0)
Malikadnan Jun 03, 2022 01:36pm
Yes
thumb_up Recommended (0)

Bloodbath at PSX: KSE-100 closes over 920 points lower amid economic headwinds

PD prepares $496m gas pipeline augmentation plan

Intra-day update: rupee registers marginal losses against US dollar

Pakistan receives $500mn from AIIB: finance ministry

Hina Rabbani Khar meets Afghan foreign minister on one-day Kabul trip

Oil jumps on hopes for easing in China’s COVID controls

S&P Global lowers 2023 growth forecast for emerging markets

IMF, govt begin virtual engagement

Dar willing to allow sugar export?

Tax-exempted areas: FBR sets up checkposts to monitor supplies

TTP ends ceasefire, orders nationwide attacks