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KARACHI: The KSE-100 index plunged by a whopping 714.14 points (2.12 per cent) to close at over a three-year (39 months) low at 32,958.35. The market capitalisation eroded by Rs 115 billion in a day.

The market opened in the negative and was rocked by the analysts’ expectations over the State Bank of Pakistan monetary statement to be announced today (Tuesday) possibly after the close of trading hours. The consensus projection of analysts was a rate hike by 100 basis points.

“The interest rate rise in line with expectations would lead to an increase in the policy rate to 13.25pc, representing a cumulative increase of 750bps since January 2018,” said a fund manager. Mutual Funds, meanwhile, were the major sellers of equity worth $3.32 million, according to figures released by the National Clearing Company of Pakistan. Investors lost appetite for equities and shifted to risk-free fixed income securities that provided more attractive returns.

The investors’ sentiments were negative all through the day as they worried over a hit on corporate bottom lines due to higher interest rates, slowdown in the economy amid recent protest strike by traders and rupee’s further fall against the dollar. Foreign Direct Invest­ment for June declined by 58pc to $130m.

The volume increased 24pc to 69m shares, from 55.5m while traded value rose by merely 3pc to $14.7m as against $14.3m. Stocks that contributed significantly included Maple Leaf Cement, TRG Pakistan, K-Electric, Bank of Punjab and Unity Foods, which formed 31pc of total turnover.

Sector wise, fertiliser shed 135 points from the index, followed by exploration and production, decrea­sing 115 points, banks 83 points, power 72 points, oil and gas marketing companies 67 points. Among scrips, major losers were Pakistan Petroleum, down 56 points, Hub Power 50 points, Engro Corporation 47 points, Fauji Fertiliser 46 points and Oil and Gas Development 30 points.

Published in Dawn, July 16th, 2019