Stocks tumble at PSX, despite central bank rate cut

• The index was being traded at 30,578.72 points witnessing a drop of 2038.21 points and a negative percentage change of 6.25pc.
• The development comes after Pakistan's central bank announced to cut the key policy rate by 75 basis points.

Despite a drop in interest rate by the State Bank of Pakistan (SBP), the Pakistan Stock Exchange remained engulfed in coronavirus fears. After the benchmark KSE-100 Index declined by over 1,700 points on Wednesday.

At the time of filing this report, the index was being traded at 30,578.72 points witnessing a drop of 2038.21 points and a negative percentage change of 6.25pc. It may be mentioned here, that PSX triggered a market halt at 10:15am, due to a 5pc decline in KSE30- Index.

Meanwhile, BRIndex100 was being traded at 3,089.58 points showing a negative change of 242.27 points or a negative percentage change of 7.27pc.

On Tueday, the KSE-100 Index plunged by 1,067.98 points or 3.17 percent to 32,616.93 points. Daily trading volumes increased to 240.379 million shares as compared to 215.437 million shares traded.

The development comes after Pakistan's central bank announced to cut the key policy rate by 75 basis points and announced two special financing schemes to address the economic and health challenges posed by the spread of coronavirus (COVID-19).

Talking to newsmen after a meeting of Monetary Policy Committee (MPC) on Tuesday at SBP head office, Governor State Bank Dr. Reza Baqir said the Committee has decided to cut the policy rate by 75 basis points to 12.50 percent. In reaching this decision, the MPC considered key trends and prospects in the real, external and fiscal sectors, and the resulting outlook for monetary conditions and inflation, he added.

“The overall situation in the wake of COVID-19 is still uncertain and SBP also remained vigilant. This is the first steps, not the last and SBP will take more actions and steps, whenever required to support the economy,” he said.

Meanwhile, Moody’s Investors Service has revised downward the Gross Domestic Product (GDP) forecast for Pakistan from 2.9 percent to 2.5 percent, ie, by 0.4 percent for 2020.