KSE-100 plunges over 1,000 points in intra-day trading

KSE-100 plunges over 1,000 points in intra-day trading My Country

KSE-100 plunges over 1,000 points in intra-day trading My Country

KARACHI: Stocks once again came under pressure as the KSE-100 index nose-dived over 1,000 points in intra-day trading falling below the significant psychological barrier of 36,600.

Despite the government’s announcement of returning to the International Monetary Fund (IMF) for a bailout, confidence of the investors could not be restored as the selling spree continued.

Fuelling the bearish trend, was the IMF’s projection that the average inflation rate in Pakistan might hit 14 per cent by June next year – a level that if reached could result in interest rates peaking to 15 per cent and economy drastically slowing down.

At 12:38pm, the KSE-100 Index, a benchmark for market performance, was down 1,016.35 points or 2.71 per cent to hover around 36,501.58. The current level was last seen in June 2016.

Commenting on the situation, Topline Securities’ analyst Nabeel Khursheed said IMF’s latest forecasts on Pakistan’s economy have painted a very bleak picture.

“The forecast is driving the market down. The higher inflation means exorbitant increase in the benchmark interest,” he added.

The higher inflation along with interest rate would put the economy severely under pressure, Khursheed remarked.

Other analysts said 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.

The bourse has suffered a massive reduction of $41 billion in market capitalisation to $58 billion on Friday (October 12, 2018) compared to $99 billion on May 24, 2017 when the benchmark KSE-100 index hit an all-time high at 52,876 points.

The unfolding political drama and the deteriorating macroeconomic indicators have hit the stock market hard.

KSE-100 plunges over 1,000 points in intra-day trading My Country