The unnerved investors continued offloading shares on Pakistan Stock Exchange (PSX) on Monday as stocks witnessed across the board selling pressure.
The benchmark KSE 100 index shed 750 points to close at 36767. Trading resumed in the green zone and the market gained over 50 points before the KSE-100 index nosedived.
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Soon after the opening of trading, bear gripped the market. In the intra-day trade, the market lost over 1240 points amid selling pressure from the investors unnerved by political uncertainty and the deteriorating macroeconomic indicators.
However, in the last session, the market recovered some of the losses and closed 750 points down at 36767. Â During the trade, some 105,523,470 shares changed hands.
It appears the government’s decision to approach the International Monetary Fund for a bail-out package has failed to soothe the investors’ unease and concerns.
According to market analysts, the bearish trend was stirred by the IMF’s projection that the average inflation rate in Pakistan might hit 14 per cent by June next year. They said IMF’s latest forecasts on Pakistan’s economy have painted a very bleak picture.
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They opined that the foreign selling and redemption calls to mutual fund managers to sell part of their holdings at current low prices, also contributed negatively to the index.
Senior analyst and Chief Executive Officer (CEO) of Arif Habib Corp Ahsan Mehnati said that panic selling continued in the quarterly earnings season amid major fall in global equities.
He said the investor concerns over a possible hike in interest rate and rupee depreciation with potential IMF loans bailout package also contributed to the market plunge.
Mehnati said that investors weighed in on PM marathon meeting with key businessman, economists to resolve financial crises. He added late session support witnessed in banking and oil stocks on higher banking spreads and oil prices.
Dismal data on external account, concerns for the impact of CPEC curtailment, rupee depreciation and rising interest rates on corporate earnings outlook in auto, cement and industrials played a catalyst role in bearish close, Mehnati opined.
