KSE-100 closes below 40,000-point mark over policy rate speculation

The Pakistan Stock Exchange (PSX) saw a mixed session on Monday and the KSE-100 Index fell 0.28% as investors remained concerned over an expected hike in the key interest rate by the State Bank of Pakistan (SBP) in its Monetary Policy Committee (MPC) meeting scheduled for Tuesday.

The central bank is expected to raise the policy rate by a steep margin, according to market expectations.

Investor sentiment dampened as such a move will adversely impact the cost of the doing business, and the stock market closed below 40,000 point mark.

By the end of the day, the KSE-100 Index settled with a decrease of 110.93 points or 0.28% to close at 39,889.9 points.

Optimism grips PSX, KSE-100 rises 0.38%

Trading began with a spike but the KSE-100 declined in early hours before hitting intra-day high towards midday. The final hours of the session saw the market erase all gains and close in the red.

Automobile, cement and banking sectors saw massive sell-off while oil space closed with gain. Fertiliser and chemical segments closed on mixed note.

A report from Arif Habib Limited stated that a mixed session was recorded at the PSX to kick off the business week.

“The market opened in the green zone, but lack of investor involvement drove the index down into the red zone, where it remained for the rest of the trading session, swinging in both directions and eventually closing in the red,” it said. “Due to speculation of a policy rate hike in the Monetary Policy Committee meeting on Tuesday, investors chose to stay on the sidelines.”

Volumes in the mainboard dried up, while third-tier companies continued to dominate the volume board, the report said.

A report from Capital Stake stated that the PSX ended first trading session of the week on a negative note. Indices swayed in both directions, while volumes decreased from last close, it said.

On the economic front, the consumer price index (CPI) based inflation increased to 35.4% in Pakistan on a year-on-year basis in March 2023 against 31.5% in February 2023.

Sectors dragging the benchmark KSE-100 index south included cement (41.34 points), fertiliser (28.23 points) and banking (27.43 points).

Volume on the all-share index dipped to 74.4 million from 112.2 million on Friday while the value of shares traded plunged to Rs1.75 billion from Rs3.93 billion recorded in the previous session.

Telecard Limited was the volume leader with 17.78 million shares followed by WorldCall Telecom with 3.7 million shares and Pak Elektron with 3.6 million shares.

Shares of 298 companies were traded on Monday, of which 109 registered an increase, 167 recorded a fall and 22 remained unchanged.