KSE-100 plunges despite IMF loan approval

KARACHI:

Pakistan’s stock market took a heavy toll on Monday, as the benchmark KSE-100 plunged 744 points and plunged below the 46,000 point level.

The higher-than-expected benchmark interest rate hike of 150 basis points weighed on the business environment and even the long-awaited approval of the International Monetary Fund for the disbursement of the next loan tranche failed. not raised the feelings of investors.

Bears were seen haunting the market throughout the day, as nervous investors shed their positions amid massive overseas selling. Heavy autos, fertilizers, cement, petroleum and financials were hit the hardest by widespread profit taking and mostly closed with losses.

Even the announcement of a further appreciation of the rupee against the US dollar was played down by market participants who resorted to liquidating their holdings.

Earlier, trading started with a brief rally and the market passed 46,600 points in the first hour. However, the index was unable to support the uptrend and plunged amid widespread profit taking and remained in negative territory for the remainder of the session.

At the close, the benchmark KSE-100 fell 744.41 points, or 1.6%, to 45,745.

A report from Arif Habib Limited said the bears reigned over the bulls on Monday as investors were unable to digest the higher-than-expected interest rate hike.

The start of the renewal week was marked by bearish momentum despite the long-awaited news that Pakistan and the International Monetary Fund (IMF) have reached a staff-level deal.

First, only cyclical stocks went under the radar and investors started shedding their positions. Later, a bloodbath was observed as the sale took hold.

On the institutional front, a cautious stance was noted due to concerns over the frenzy of overseas sales.

Sectors contributing to performance are cement (-184 points), technology (-153 points), exploration and production (-90 points), fertilizers (-70 points) and textile composites (-36 points ).

JS Global analyst Waqar Iqbal said the KSE-100 index rose 112 points during intraday trading, but failed to maintain positive momentum.

Two major announcements were made over the weekend, namely an interest rate hike of 1.5% and Pakistan’s staff level agreement with the IMF.

“The realization of the IMF money with the Saudi aid plan should provide a reason for the market rebound,” the analyst said.

Overall trading volume fell to 261.9 million shares, from 304.21 million on Friday. The value of the shares traded during the day was 10.94 billion rupees.

The shares of 344 companies were traded. At the end of the day, 70 stocks closed higher, 263 fell and 11 were unchanged.

TRG Pakistan Limited was the volume leader with 22.37 million shares, losing Rs 7.74 to close at Rs 95.51. It was followed by Byco Petroleum with 21.6 million shares, losing 0.21 Rs to close at Rs 6.83 and TPL Properties XB with 15.8 million shares, losing Rs 0.83 to close at Rs 49.46.

Foreign institutional investors were net sellers of Rs 1.68 billion shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.

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