KARACHI: Bears rampaged through the Pakistan Stock Exchange on Monday as investors succumbed to selling pressure following the upward revision in the key interest rate last Friday.

The State Bank of Pakis­tan (SBP) increased the target rate by 100 basis points to 16 per cent, which is the highest level since the late 1990s. Topline Securities reported that the last week’s monetary policy announcement resulted in the KSE-100 index opening in the red zone and then dipped to an intraday low of 973 points before inching back up a little afterwards.

The SBP’s decision will make borrowing for businesses costlier as banks peg their lending rates to the Karachi interbank offered rate (Kibor) which, in turn, is influenced by the benchmark set by the central bank eight times a year.

In addition, the announcement by former premier Imran Khan that he’d consider resigning from the provincial assemblies also put a dampener on market sentiments. Investors opted for profit-taking in anticipation of a further rise in the political temperature.

According to stock analyst Ahsan Mehanti, the instability in the rupee’s value against the dollar, slump in global crude oil prices, weak international equities and concerns about a massive surge in one-year Kibor to over 17pc also played the role of a catalyst in the bearish close of the index.

As a result, the KSE-100 index settled at 42,071.34 points, down 865.39 points or 2.02pc from the preceding session.

The trading volume increased 37.8pc to 244.4 million shares while the traded value went up 15.1pc to $31.1m on a day-on-day basis.

Stocks contributing significantly to the traded volume included K-Electric Ltd (29m shares), WorldCall Telecom Ltd (22.5m shares), Dewan Motors Ltd (13.8m shares), Hascol Petroleum Ltd (12.1m shares) and Cnergyico PK Ltd (9.4m shares).

Sectors that contributed negatively to the index performance were cement (204.7 points), exploration and production (114.8 points), commercial banking (110.1 points), fertiliser (78.4 points), technology and communication (53.5 points).

Companies registering the biggest increase in their share prices in absolute terms were Nestle Pakistan Ltd (Rs84), Mehmood Textile Mills Ltd (Rs54), Murree Brewery Company Ltd (Rs9.22), the Thal Industries Corporation Ltd (Rs9) and Pakistan Services Ltd (Rs8.64).

Shares that declined the most in rupee terms were Gatron Industries Ltd (Rs28.60), Khyber Tobacco Company Ltd (Rs28.32), Mari Petroleum Company Ltd (Rs26.93), Siemens Pakistan Engineering Ltd (Rs26.39) and Lucky Cement Ltd (Rs26.07).

Foreign investors were net buyers as they purchased shares worth 1.06m.

Published in Dawn, November 29th, 2022