KSE-100 tumbles over 7,000 points at open amid oil price shock and policy uncertainty
A stock broker reacts while monitoring the market on the electronic board displaying share prices during trading session at the Pakistan Stock Exchange, in Karachi on July 3, 2023. Photo: Reuters/ File
KARACHI:
Heavy selling gripped Pakistan Stock Exchange (PSX) on Monday as the benchmark KSE-100 index plunged at the start of trading, falling by 7,322 points, or 6.21% shortly after the market opened. The sharp decline triggered widespread panic among investors and intensified pressure across major sectors.
According to market data recorded at 12:44 pm, the KSE-100 index was standing at 146,620.56 points, reflecting a loss of 10,995.24 , or 6.98%, compared with the previous session’s close.
In response to the steep fall, the PSX issued a market halt notice, stating that a trading suspension had been activated after the KSE-30 index dropped by 5% from its previous closing level. As per PSX regulations, trading across all equity markets was temporarily halted and all outstanding orders in the system were automatically cancelled. The exchange further informed participants that trading would resume according to the prescribed reopening schedule following the halt.
Market sentiment remained fragile amid growing uncertainty surrounding the upcoming monetary policy decision. The Monetary Policy Committee (MPC) is scheduled to announce its interest rate decision later today, and concerns over a potential rate hike have added to investor nervousness.
Also read: Shares skid as oil surge threatens inflation shock
This uncertainty, combined with a sharp increase in global oil prices, fuelled widespread selling across the market, ultimately leading to the trading halt.
KTrade Securities equity trader Ahmed Sheraz told The Express Tribune that the unprecedented surge in oil prices from around 83/bbl to nearly $119/bbl — had already weighed heavily on investor sentiment. Besides, hopes of a potential de-escalation failed to materialise as hostilities intensified, further exacerbated by strikes on oil tankers in the region, he commented.
“For Pakistan, persistently higher oil prices could carry significant economic repercussions, like current account deficit, pressure on Pakistani rupee, inflation and including the risk of slower growth.”
This concern is further compounded by the possibility of an interest rate hike, with the MPC set to announce its decision later today (Monday). Amid this increasingly uncertain backdrop, investor anxiety triggered broad-based selling across the market, ultimately leading to a trading halt today, Sheraz added.
