Stock market sheds 1,243 points in intraday trading

Pakistan Stock Exchange's (PSX) benchmark KSE-100 index shed 1,243 points in intraday trading on Wednesday before bouncing back later in the day and halving its losses.

The benchmark index opened at 46,008.85 points and gained slightly within the opening minute of the session to reach day's high of 46,031.89 points. The bourse then witness sharp selling and by 1:12pm had plunged to day's low of 44,788.17 points.

It did stage a recovery and had cut its losses to 680.35 points by 2:43pm, with less than an hour of trading still left in the session. Saad Ali, head of research at Intermarket Securities, deemed the dip "a late reaction to the monetary policy".

"According to most surveys, a rate hike was not expected by the majority of the market. The SBP has also guided for further increases which generally have an inverse correlation with the index," he said.

"Going forward, if the policy rate continues to be jacked up, banks the biggest sector-wise constituent should carry the market forward. Among them, mid-tier players, including Islamic, are likely to perform better than their larger counterparts."

According to Intermarket Securities' head of equities, Raza Jafri, "continued foreign selling combined with local institutional selling dragged the stock market lower sharply".

He said the increase in interest rate, though "justified and sensible", had proven to be the trigger. "Dips are a buying opportunity and confidence can shore up when the

IMF talks near," he added. Meanwhile, Saad Bin Naseer of Mettis Global - a web-based financial data and analytics portal - said the market had been in a congestion phase for a long time and was trading within a narrow range.

"There were no positive triggers in terms of news to move it but the abandonment of cricket tours by New Zealand and England reignited uncertainty about the future. The interest rate hike and the upcoming Financial Action Task Force meeting also changed the sentiments," he explained.