Bloodbath in Pakistan stocks as index falls more than 2,000 points

The Pakistan Stock Exchange (PSX) witnessed a massive selling pressure on Thursday as the benchmark KSE-100 index shed more than 2,000 points in intraday trading, Dawn reported.

The market began its slide soon after opening at 45,369.14 points, with the benchmark KSE-100 index down 2,005 points, or 4.42 per cent, by 1.30 p.m.

If the index goes five per cent above or below its last close and stays there for five minutes, trading in all securities is halted for a specified period.

Intermarket Securities' head of equities Raza Jafri cited the widening trade deficit as the reason behind the plunge, saying it will keep the rupee under pressure and lead to "aggressive" increases in the interest rate.

The view was also shared by CEO of Topline Securities Mohammad Sohail who said the "shocking" import bill in November, coupled with the central bank's "aggressive borrowing" in yesterday's T-bill auction were behind the nosedive, the report said.

Meanwhile, AKY Securities Chief Executive Officer Amin Yousuf noted that stock markets across the world were bearish on the back of countries imposing restrictions to control the spread of the Omicron variant. A similar effect was also seen at the PSX, he added, as per the report.

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, Yousuf said.

In addition, there was an expectation of further hike in the interest rate in the monetary policy announcement on December 14 because of which there was selling pressure in the market, he added.

Meanwhile, the US dollar soared to Rs 176.30 in interbank market after gaining Rs 1 in value.

--IANS

san/pgh