KSE-100 Falls Near 64,000 as Market divided Over Monetary Policy Announcement
Karobar
The Pakistan Stock Exchange (PSX) witnessed a tumultuous session on Wednesday, as late-session selling intensified, resulting in the benchmark KSE-100 index plummeting by nearly 750 points. This marked a continuation of the downward trend from the previous day, signaling growing investor apprehension.
Despite maintaining a relatively stable range throughout most of the trading session, the atmosphere shifted dramatically in the final hour as investors engaged in a widespread sell-off. By 1:30pm, the KSE-100 index had fallen to 64,048.44, reflecting a significant drop of 753.26 points or 1.16%, and even touched an intra-day low of 63,856.51.
The selling pressure was indiscriminate, with sectors such as refineries, autos, and cements bearing the brunt of the downturn. Market analysts have linked this last-minute rush to offload stocks to a prevailing sense of caution among investors, who are bracing for the upcoming monetary policy announcement from the State Bank of Pakistan (SBP) scheduled for Monday.
In parallel, Pakistan's newly elected government is gearing up for crucial discussions with the International Monetary Fund (IMF). The financial circles are abuzz with speculation that Islamabad will seek another bailout during these talks.
The IMF delegation is set to arrive in Pakistan on Wednesday for what will be the second and final review under a $3-billion standby arrangement. According to finance ministry officials quoted by Reuters, this four-day review commencing on Thursday could unlock a tranche of approximately $1.1 billion upon successful completion.
However, it's not just the anticipation of monetary policy that's weighing on investor sentiment. The stock market has been grappling with uncertainty regarding the key interest rate. Just on Tuesday, the PSX experienced severe selling pressure that pushed the KSE-100 Index below the 65,000 threshold, shedding nearly 1,000 points—a move analysts have described as a 'technical correction' long in the making.
On a global scale, Asian markets seemed to adopt a more optimistic outlook on Wednesday. Buoyed by record highs on Wall Street, Asian shares reached seven-month highs despite marginally higher-than-anticipated US inflation figures. Investors appear confident that this inflationary uptick won't impede anticipated mid-year interest rate cuts.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up by 0.2%, hitting its highest point since early August and reflecting a broader trend of resilience amidst economic uncertainties.
