The benchmark KSE-100 index plunged and lost over 1200 points during the intraday trade, currently trading at 44,055.26. The drop comes in the wake of a bill moved in the US Senate which imposes sanctions on the Afghan Taliban and has the potential to be extended to Pakistan.
According to reports, the proposed bill requires the US Secretary of State, Secretary of Defense and the Director of National Intelligence to assess and submit a report on all entities which provided support to the Taliban.
The market is suffering due to geopolitical tension as well as the tightening of monetary policies by the state in efforts to combat the swelling import bill.
Sectors with the highest-selling activity are Technology & Communication, Cement, and Commercial Banks as they lost about 170, 164, and 108 points respectively.
It must be noted that the cement sector remained under pressure as coal prices continue to rise to USD190.75/MT, according to Ismail Iqbal Securities.
In terms of companies, which have taken the worst hit are the scrips of SYS, PTC, TRG, CHCC, DGKC, FCCL, ABL, AKBL, and BAFL.
The Interbank market observed the Pakistani Rupee (PKR) further depreciating by 41 paise against the US dollar due to strong dollar demand and mounting international crude oil prices.
The domestic unit had been in a free-fall against the dollar for the past month, as the dollar peaked at an all-time high of Rs170 on Tuesday. The dollar was currently being quoted at 170.38/170.43 in comparison to the previous day’s close of 169.97, a record low.
On the regional front, Shanghai and Hong Kong markets also suffered losses on Wednesday, as investors scrambled to exit Chinese stocks which have been hit due to the unprecedented power outages leading to halts in production.
Negative sentiment was further aggravated as economic uncertainties loom ahead of a tightening of US monetary policy and worries over rising inflation.
The KSE-100 Index has witnessed a downward trend for several weeks now, dropping to an over four-month low before Wednesday’s session. The economic sentiment turned less bullish owing to a flaring current account deficit, rupee depreciation and interest-rate hike by the State Bank of Pakistan.