ISLAMABAD: The Pakistan Stock Exchange (PSX) today faced a massive selling tendency and the benchmark KSE-100 index lost about 1,936 points in intraday trading.
The market began its slide soon after opening at 45,369.14 points Thursday morning, with the benchmark KSE-100 index down 1,936 points by 12:55 Noon.
Interestingly, State Bank of Pakistan raised the interest rate by 150 basis points, to 8.75 percent on Nov 19, 2021, while the trade deficit is widening from July 2021, but the analysts today linked these old developments with sudden crash of PSX.
Analysts said the widening trade deficit triggered erosion in the stock market because this factor will keep the rupee under pressure and lead to “aggressive” increases in the interest rate.
However, it is important to keep in mind that authorities have already commenced macro-course correction while global commodities are coming down due to Omicron variant of the coronavirus. There may be an element of one-offs in November imports too and coming months may show better numbers.
Experts further stated that the stock markets across the world were bearish on the back of countries imposing restrictions to control the spread of the Omicron variant and a similar effect was also seen at the PSX.
The hike in the interest rate by 125 basis points by the State Bank of Pakistan (SBP) during the auction of T-bills was also increasing investors’ problems. In addition, there was an expectation of further hike in the interest rate in the monetary policy to be announced on December 14 because of which there was selling pressure in the market.
