KSE-100 falls below 43,000 on monetary policy anticipation

Selling pressure continued at the Pakistan Stock Exchange (PSX) on Monday as the KSE-100 index closed negative for the third consecutive session, driven by political uncertainty and anticipation over monetary policy.

Investors remained in panic mode due to the two developments and as a result, the KSE-100 shed 443.99 points or 1.03% to close at 42,826.66.

On Sunday, Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan was booked under Section 7 of the Anti-Terrorism Act (punishment for acts of terrorism) regarding his comments during his Islamabad rally. Late at night, party leaders gathered at Bani Gala after unconfirmed reports of Imran’s imminent arrest made the rounds.

KSE-100 down 0.48%, ends week below 43,300 level

This news signalled acceleration of political turbulence in the country and drove sell-off at the equity market.

In addition, investors opted to remain on the sidelines in wait for State Bank of Pakistan’s (SBP) monetary policy announcement which was revealed after closure of the market.

Monetary policy: SBP keeps key interest rate unchanged at 15%

Trading began with a slide and the market remained range-bound for the rest of the day. The market flattened in the final hours and closed in the red.

Automobile, cement, bank, fertiliser, oil and refinery sectors took a hit, with some of them closing entirely in the red.

A report from Capital Stake stated that downward trend continued at the PSX as investors adopted a cautious approach ahead of the monetary policy announcement later in the day.

“Indices continued to slip lower and lower all day long with the benchmark KSE-100 index falling below 43,000 mark, while volumes depreciated from last close,” it said. “As per analysts, rising political turmoil also dented investors’ confidence.”

Topline Securities, in its report, cited that Pakistan equities had a bearish day on the back of increasing political noise as news flow regarding possible arrest of top leadership of PTI (an opposition to the ruling alliance) since last night.

On the economic front, the central bank maintained the interest rate at 15% in monetary policy announcement. Moreover, rupee dropped 0.93% against the US dollar as political noise engulfed the currency market.

As per the State Bank of Pakistan (SBP), the local currency settled at 216.66 against the US dollar after depreciating Rs2.01 or 0.93%.

Rupee registers 0.93% fall against US dollar amid political noise

Sectors dragging the KSE-100 lower included banking sector (103.567 points), cement sector (50.59 points) and technology and communication sector (46.07 points).

Volume on the all-share index plunged to 194.67 million from 306.2 million on Friday. On the other hand, the value of shares traded declined to Rs5.33 billion from Rs6.39 billion recorded in the previous session.

Pak Refinery was the volume leader with 17.53 million shares, followed by K-Electric with 14.69 million shares, and WorldCall Telecom with 12.97 million shares.

Shares of 329 companies were traded on Monday, of which 66 registered an increase, 245 recorded a fall, and 18 remained unchanged.