Bears prevail at PSX as policy rate decision dampens market sentiment

KARACHI: The Pakistan Stock Exchange (PSX) closed in the red on Tuesday following a volatile session, falling 178.69 points or (-0.16%) and closing at the 114,177.65 level, as investors reacted to the policy rate decision, dampening market sentiment.

The KSE-100 index witnessed a fierce tug-of-war between bulls and bears in today’s session.

“The market opened on a negative note, reacting sharply to the State Bank of Pakistan’s decision to maintain the policy rate at 12%, despite a significant decline in inflation numbers,” stated the Topline Securities note.

This decision dampened investor sentiment, pushing the index to an intraday low of 746 points.

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“The second half of the session saw a resurgence of buying interest. Market participants responded positively to speculation regarding the possible clearance of the longstanding circular debt.

This wave of optimism propelled the index to recover and register an intraday high of 129 points,” Topline stated.

The benchmark index closed on a relatively flat note, fluctuating throughout the session as investors reacted to the MPC’s decision to keep the policy rate unchanged, stated Ismail Iqbal Securities.

“Additionally, anticipation surrounding further developments in the IMF review kept market participants in a wait and see mode,” Ismail Iqbal Securities added.

The positive movement was primarily fueled by PSO, PPL, OGDC, MEBL, and HUBC, which together contributed 425 points to the index. Conversely, UBL, SRVI, FFC, and EFERT weighed on the market, pulling the index down by 210 points.

Overall, market activity saw a total of 318 million shares traded, resulting in a turnover of Rs22.8 billion. SSGC led the volume charts with 26 million shares exchanged.

In the last session, the benchmark index had also closed in red, falling 42.35 points, or (-0.04 per cent), closing at 114,356.34 level on account of uncertainty over circular debt concerns and policy rate decisions.