Shares at PSX lose over 500 points

The Pakistan Stock Exchange (PSX) fell over 500 points on Monday, with analysts blaming the drop on concerns about more interest rate hikes.

The benchmark KSE-100 index was trading at 47,648.33 points at 12:50pm, down 570.16 points or 1.18 percent from the previous close of 48,218.49 points, according to the PSX website.

According to Intermarket Securities’ Head of Equity Raza Jafri, despite recent improvements, the economy remains vulnerable.

“July’s large current account deficit raises concerns about further interest rate hikes, particularly given that inflation remains high,” he said, adding that a lack of clarity on circular debt settlement was also weighing on investor mood.

Salman Naqvi, head of research at Aba Ali Habib Securities, blamed today’s losses on political instability and the country’s deteriorating law and order situation.

He further stated that the Oil and Gas Development Company (OGDC) alerted investors last week that the company had not received any formal contact from authorities regarding the settlement of the circular debt.

“This isn’t to say that this [circular debt settlement] isn’t in the works… It is, but there is clearly some ambiguity about the situation,” he continued.

According to Naqvi, the market is on a “correction course” and will remain so for the foreseeable future.

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