The Pakistan Stock Exchange's (PSX) benchmark KSE-100 Index retreated 0.75% on Wednesday, but managed to sustain the 46,000 level as participants were rattled by the central bank that said it will hold the monetary policy announcement a week earlier.
The fall was in stark contrast to share performance a day ago when the KSE-100 had increased 807 points on bullish momentum. However, announcement by the State Bank of Pakistan (SBP) later on Tuesday along with its reasoning on inflationary and balance-of-payments pressure meant investors were rattled with economic concerns.
SBP prepones monetary policy announcement, will now hold it on November 19
The SBP had said that the Monetary Policy Committee (MPC) meeting was brought forward in light of "recent unforeseen developments that have affected the outlook for inflation and the balance of payments, and to help reduce the uncertainty about monetary settings prevailing in the market".
Stocks opened positive briefly, but swung quickly over to the red with support witnessed near the 46,000 level.
At close on Wednesday, the KSE-100 finished with a fall of 348.49 points or 0.75% to settle at 46,194.42.
KSE-100 gains 807 points as positive triggers aid bulls' comeback
"Bearish momentum was witnessed as aggressive tightening of 100bps is expected in the upcoming preponed MPS announcement," said Arif Habib Limited in its post-market comment. "With mounting inflationary expectations and rising secondary market yields, across-the-board sell-off was observed just after the opening bell of the market mainly led by the cement, steel and technology stocks.
"Accumulation was witnessed in the banking stocks as investors opted for cautious approach. In the last trading hour, value hunting was seen by the institutional buyers."
Volume contracted marginally, clocking in at 238.5 million on the all-shares index, down from 243.2 million a day ago. Value of shares also decreased marginally to Rs10.12 billion on Wednesday.
Service Fabrics was the volume leader with 18.94 million shares, followed by TRG Pakistan Ltd with 15.97 million shares, and Ghani Global Holdings at 13.97 million shares.
Shares of 343 companies were traded on Wednesday, of which 83 registered an increase, 241 recorded a fall, and 19 remained unchanged.