PSX loses 203 points over policy rate uncertainty
Benchmark index decreases 0.6% to settle at 33,672.49
The stock market experienced yet another lacklustre trading session on Friday and fell 203 points due to absence of major triggers that could drive the market. Announcement by the State Bank of Pakistan (SBP) that it would unveil the monetary policy next week kept investors at bay.
The benchmark KSE-100 index opened upwards but remained flat in first half of the trading session. However, the announcement of monetary policy date and expectations for further increase in the key interest rate sparked sell-off in the second session, which dragged the index below 33,700 points.
Overall, the index moved in the range of +126 points and -276 points, ending the second session down by 193 points (unadjusted). The cement sector led the volumes with trading in 9.6 million shares, followed by the power sector (7.8 million). K-Electric ranked first in terms of volumes with trading in 6.9 million shares, followed by Maple Leaf Cement (4.5 million).
Overall, trading volumes increased to 55.5 million shares compared with Thursday’s tally of 39.5 million. The value of shares traded during the day was Rs2.3 billion. Shares of 304 companies were traded. At the end of the day, 62 stocks closed higher, 218 declined and 24 remained unchanged. K-Electric was the volume leader with 6.9 million shares, losing Rs0.09 to close at Rs4.
It was followed by Maple Leaf Cement with 4.5 million shares, losing Rs1.14 to close at Rs22.12 and The Bank of Punjab XD with 3.9 million shares, losing Rs0.02 to close at Rs8.79. Foreign institutional investors were net buyers of Rs107.4 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.
Uncertainty over the SBP policy rate announcement next week, dismal data on auto sales which slid in FY19 and concerns over unstable rupee-dollar parity played the role of catalysts in bearish close of the market. At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 202.91 points, or 0.6%, to settle at 33,672.49.
The market remained lacklustre during the day. The factor behind low volumes and lack of investor confidence in equities appears to be higher interest rate as concerns mounted due to earlier-than-anticipated announcement of the monetary policy. As per the central bank, the monetary policy will be announced on July 16 rather than the end of July, as anticipated earlier.
Hubco, which had been in the limelight in past trading sessions, remained negative amid low trading volumes.