Stocks lose 294 points after policy rate hike
KARACHI: Stock market was weighed down on the first trading day of the week by the State Bank of Pakistan (SBP) policy rate hike by 50 basis points to 10.75 per cent on Friday as investors who were spooked by further inflationary pressures, increase in the cost of doing business and threat of under performance of key manufacturing sectors.
As a result, the KSE-100 index dipped by 294.49 points (0.76pc) and closed at 38,354.85. Earlier it made the intraday low by 438 points. Although the central bank’s decision was in line with expectations, stock prices of most sectors tumbled, except banks which had a positive correlation to interest rate increase.
Further, the SBP revised down its real GDP growth to 3.5pc from earlier forecast of around 4pc.
Investor participation reduced significantly with volume tumbling by 52pc over last Friday to 66 million shares while the traded value also declined by 46pc to $19.9m. Mutual funds were major sellers of equity worth $2.37m, which was matched by individuals buying shares of $2.34m. Foreign investors took a cautious stance and added just $0.45 worth stock to their portfolio. Trading was again dominated by Unity Foods (right issue) which remained the top-traded share.
Fertiliser was the worst performing sector, eroding 83 points, followed by exploration and production giving up 56 points and cement 53 points.