KSE-100 plummets by over 1,500 points in intraday trading
Bears were in firm control of the Pakistan Stock Exchange (PSX) on Monday as the benchmark KSE-100 index shed more than 1,300 points in intraday trading, while dollar continued its flight towards record levels against rupee.
According to PSX website, KSE-100 Index opened at 44,840.81 points, made a high of 44,841.41 points before going down rapidly. The bourse took brief corrections but eventually continued with its downward trajectory and sank to 43,289.50 around 1:45pm, which represented an intraday decline of 1,551.31 points.
Raza Jafri, head of Equities at Intermarket Securities, said the market was under pressure because of the depletion of foreign reserves and delay in the resumption of the International Monetary Funds programme (IMF) among other factors.
"The government has seemingly, so far, drawn a blank when it comes to securing funds from friendly countries. The pressure in global equity markets is also hurting sentiment," he explained, cautioning that in the near future the market would track progress on the foreign reserves, hence, positive developments on this front could help halt the slide.
Khurram Shehzad, CEO of Alpha Beta Core, shared a similar opinion.
"No development on funding from Saudi Arabia, UAE and the IMF has worried investors," he said, adding that the Shehbaz government's reluctance in passing on the petrol subsidy could also be one of the reasons for the "PSX bloodbath".
Muhammad Sohail, CEO at Topline Securities, said the stock exchange was witnessing a slump due to which the benchmark index had fallen by more than 1,500 points.
Speaking to Dawn.com, he said investors had become fearful after reports suggested that talks with the IMF would resume after May 18. He added that the government was also not ready to abolish the subsidy on petroleum products which was putting pressure on the economy.
"The risk of interest rates rising in the next monetary policy is also propelling investors to exit the equity market," he said.
Meanwhile, the dollar was trading at Rs188.5 in the interbank at around noon on Monday as the rupee depreciated by Rs1.25, according to the Forex Association of Pakistan. The open market rate of the greenback was Rs187.8 at the same time.
The dollar's highest level against rupee remains Rs189.25 - a level that was seen on April 1 when the political turmoil was at its apex. In the immediate aftermath of the change in government, it had gone down in the face of the rupee's strengthening but the correction soon ran out of steam and now the greenback is soaring back to its record high.
Malik Bostan, chairman of the Forex Association of Pakistan, attributed today's hike in dollar price to payments