Rupee settles at 223.95 against US dollar in interbank market

KARACHI: The Pakistan Stock Exchange (PSX) plunged 2% (or almost 900 points) to close to 42,000 points at around 1:8pm on Monday, as traders aggressively pulled out investment in panic after the central bank unexpectedly hiked the key policy rate by 100 basis points to over two decades high at 16%.
The development stands negative from companies listed at the bourse, as it would reduce flow of credit to private sector and hurt their net profits, going forward.
“Market down 650 points at opening after unexpected rate hike,” Topline Securities CEO Muhammad Sohail said in a brief comment.
Earlier, the market was strongly expecting no change in the policy rate, so that the fading economic activities could gradually stabilize. However, the latest rate hike may further hurt economic activities.
The weekend political developments were also reportedly to have informed the investors’ decisions.
Former prime minister Imran Khan’s statement that the party will quit all provincial assemblies, to force the incumbent federal government to hold early elections, added gloom to the PSX.
The sales were seen across the board, including on penny and stable stocks. The market was hovering at around three months high before it came under selling pressure.-PNP