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Markets

KSE-100 plummets over 1,242 points on inflation outlook, rate hike fear

  • Benchmark index has been on a losing run for a number of sessions owing to macroeconomic uncertainty, inflationary outlook, rupee's consistent fall
Published August 31, 2023
File Photo: Reuters
File Photo: Reuters

Losses continued to mount at the Pakistan Stock Exchange (PSX), as the benchmark KSE-100 Index dropped by 2.69% during trading on Thursday.

The KSE-100 started slightly positive, reaching an intra-day high of 46,358.02. However, any minute gains were erased soon enough with investors then resorting to dump-and-run, pushing the KSE-100 deep into the red territory.

At close, the benchmark index settled at 45,002.42, down by 1242.14 points or 2.69%. It had earlier fallen to a low of 44,459.63, a decrease of nearly 1,800 points.

Its negative run comes after the KSE-100 Index had also fallen on Thursday for the fourth consecutive session, a slide driven by rising economic concerns among investors.

Across-the-board selling continued on Thursday, with index-heavy sectors including automobile assemblers, cement, chemical, commercial banks, oil and gas exploration companies, OMCs and refinery sectors trading in the red.

Selling was especially witnessed in the energy and banking sectors.

Negativity has persisted over the market in recent trading sessions, with investors concerned over rupee’s continued free fall against the dollar, skyrocketing fuel prices that will push inflation up, and growing fears of another hike in the key policy rate that already stands at a record high.

Experts said market participants are expecting another policy rate hike by the central bank, in its bid to control rising inflation, in the upcoming Monetary Policy Committee (MPC) meeting, which is currently scheduled for September 14.

Abdullah Umer, a market analyst, told Business Recorder that the ongoing currency depreciation is driving negative sentiment in the market.

“The participants are unable to identify when the exchange rate would stabilise,” he said. “The depreciation has flared up concerns of higher energy tariffs and increased external debt payments.”

On the economic front, the Pakistani rupee’s downward trajectory continued as it dropped to yet another record low against the US dollar, settling at 305.54 in the inter-bank market on Thursday. At close, the rupee was down Rs1.09 or 0.36%, as per the State Bank of Pakistan. This was its 10th successive fall in the inter-bank market.

Volume on the all-share index increased to 287.35 million from 200.29 million on Wednesday.

The value of shares rose to Rs12.303 billion from Rs8.987 billion in the previous session.

WorldCall Telecom remained the volume leader with 31.87 million shares, followed by Oil & Gas Dev. with 17.5 million shares and Cnergyico PK with 13.08 million shares.

Shares of 325 companies were traded on Thursday, of which 48 registered an increase, 257 recorded a fall, and 20 remained unchanged.

Comments

Comments are closed.

Aamir Aug 31, 2023 11:46am
Still fail to see why they were so bullish in the first place when basic fundamentals were totally off. The market rose without justification and is now correcting itself
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faisal Aug 31, 2023 11:52am
Pump and dump. This market is operated by sharks to get greedy people money.
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Shahid Khan Aug 31, 2023 12:42pm
Rule of law and we will rule the world. Otherwise we are doomed
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Tulukan Mairandi Aug 31, 2023 01:05pm
Time to take to the streets
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Tulukan Mairandi Aug 31, 2023 01:07pm
Time to really show our displeasure by taking to the streets with molotovs and bringing down the narco-terror-military mafia
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Rashid Minhas Aug 31, 2023 01:33pm
@Aamir , kindly note firstly we need to learn the price action and basic data analysis like interpretation of open interest and delivery percentage before jump in, if you already know thumbs up. when settlement ratios or delivery percentage is decreasing means no one carry their delivery for next day and price is consistently going up that means Traders are running the market not by investors it will fall by no reason or they waits any news for fall that is the justification of your query.
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AmirSh. Aug 31, 2023 06:15pm
Weak economic fundamentals, low foreign remittances, high dependence on imports, low exports , instable political situation in the country, incompetent and corrupt leadership....and list goes on....are the real issue our country facing these days and these are the real reasons for this economic mess. and unfortunately, there is a no quick fix to this economic mess created in last few decades. Stable political system and a sincere leadership can only put the country back on path of progress and development and for that timely, fair, and transparent elections are a tiny step toward right direction.
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Love Your Country Aug 31, 2023 06:20pm
@Aamir , the market is ''set up'' to make short term quick bucks whenever there is an opportunity.
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TidBit Sep 01, 2023 01:02am
The pakistan experiment if officially over. No security. no economy. No democracy. The people are on the streets, while the popular leader IK is in jail. If IK is allowed to run he will beat everyone handsomely. May be that will give the market some confidence. Until then more turmoil.
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Kashif ALI Sep 01, 2023 04:06am
As far as Stocks are concerned, Sentiments run higher than supply and demand. Investor behaviour can neither be captured nor quantified. PKR devaluation is undergoing a rightful adjustment and pacing towards its equilibrium value. IMF in its report had already looked for a 20% devaluation from the 270s level. So, that is equal to a level in 330s. Far off the equilibrium. Less educated or illiterate investors will always be losers at the hands of brokers. Brokerage industry runs on high turnover of shares. So, settlement ratio going down means more trading than investment. These blood baths are a great opportunity for those who have brains. Fundamentals of good companies remain same. Patience and Risk Taking go hand in hand. Last but not the least. Do listen to brokers but never act upon them. Their analyses are always based on assumptions which may or may not be correct or aligned to the ground realities.
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