The Pakistan Stock exchange (PSX) endured intense battering at the hands of bears dominating the market for the most part of the week. Cumulatively, investors incurred losses worth Rs356.86 billion during the week owing to tightening of the monetary policy, higher than expected interest rate, strikes called by the petroleum dealers as well as the revelation of the stringent conditions placed by the IMF amongst other gloomy economic indicators. The benchmark KSE-100 index crashed around 2,550 points between November 22nd and November 26th,2021.
The market suffered a heavy thrashing at the start of the week, as the benchmark KSE-100 index on Monday plummeted by 744 points and fell below the 46,000-point level.
The benchmark interest rate being raised higher than expected devastated the market participants to the extent that even the long-awaited news of the IMF program’s revival was unable to uplift the trading environment.
The appreciation of the Pakistani rupee against the greenback could not stop market participants from selling off their holdings. Jittery investors were seen offloading their positions in the wake of massive foreign selling.
PSX endured another round of battering on Tuesday as investors kept on lamenting the central bank’s interest rate hike, of 150 basis points.
The benchmark KSE-100 index shed over 700 points and tumbled below the 45,000-point level. Bulls remained on the sidelines as bears dominated the market owing to the gloomy macroeconomic indicators.
Speculations pertaining to the harsh conditions put forth by the International Monetary Fund (IMF) for the purpose of releasing the next tranche of the loan drove across the board selloff at the bourse.
The investor confidence dropped further owing to the surge in foreign debt to $3.8 trillion during the first four months of the current fiscal year in addition to the foreign selling.
On the third day of the week, the bear-run continued at the PSX as the benchmark index offloaded close to 600 points in a dwindling session. The market shed a total of more than 2,100 points within the three days of the week.
Panic over IMF’s severe conditions drove to book profit. Furthermore, poor economic cues led to massive foreign selling during the session. The local currency also continued to depreciate against the US dollar, further denting investor spirits.
Pakistan Stock Exchange remained in a tight grip of bears for the fourth consecutive day as the KSE-100 dived below the 44,000-point barrier on Thursday due to a handful of dreary developments. Overall, the index plunged more than 2,550 points since the start of the week.
The nationwide strike called by petroleum dealers indicated a slump in the economic activity during the day and fast-tracked the market’s waning. Investors took the signal from Pakistan’s debt soaring to record-high levels and went on to sell off their holdings.
It must be noted that the expectations of a steep appreciation in rupee against the greenback following the resumption of IMF bailout proved to be untrue and it worsened the investor sentiment. Foreign selling also continued at the bourse and drove the fall further.
On Friday however, the PSX finally broke its bearish streak as it made a partial recovery on the back of positive economic developments. The KSE-100 index gained 178 points on the last trading day of the week, after posting a cumulative loss of nearly 2,550 points in the prior four sessions.
Speculation regarding the receipt of Saudi Arabian assistance combined with the resumption of the IMF loan program managed to boost investor confidence.
Furthermore, the timely resolution of the conflict over margins with petroleum dealers on Thursday evening also contributed to the bull’s comeback.
At close, the benchmark KSE-100 index recorded an increase of 178.41 points, or 0.41%, to settle at 44,114.16 ending the week with some relief for the market.