PSX sheds 715 points as investors brace for policy rate decision

Broad-based selling hits banks, cement, autos and energy stocks

KARACHI:

Anxiety over a policy rate hike by the State Bank of Pakistan (SBP) at its Monetary Policy Committee (MPC) meeting on Monday overshadowed investor optimism as decline continued at the Pakistan Stock Exchange (PSX), with selling pressure dragging the benchmark index down 714.63 points, or 0.44%, to 161,660.24 by 12:24pm.

Morning trading started with fragile sentiment as the index dropped to 162,347.31, down 27.56 points, or 0.02%, at 9:34am. The KSE-100 Index touched an intraday high of 162,487.82 and a low of 161,250.06. The benchmark index had closed at 162,374.87 in the previous session.

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Trading volume stood at 53.42 million shares, while traded value was reported at around Rs3.39 billion. Key sectors facing a sell-off included automobile assemblers, cement, commercial banks, refineries, oil and gas exploration companies and oil marketing companies.

The policy rate decision is due amid persistent inflationary pressures, higher energy costs and concerns over their impact on business activity. Any increase in borrowing costs could raise financing expenses for businesses, dampen private-sector credit demand and further constrain investment, adding to concerns over the pace of economic recovery.