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Tight Monetary Policy: KSE index loses 43.47 points as interest rate unchanged

KARACHI: The Karachi stock market faced selling pressure as a majority of investors’ hopes crashed after the State Bank of Pakistan kept the interest rate unchanged in the Monetary Policy announced on Saturday, analysts said on Monday.

The Karachi Stock Exchange (KSE) 100-share index declined by 43.47 points to close at 5,333.95 points as compared to 5,377.42 points traded in the previous session. The KSE 30 index also fell 3.10 points and closed at 5,198.91 points as against 5,195.81 points of the previous session. The KMI 30 index shed 95.62 points to close at 7,087.30 points as compared with 7,182.92 points of the previous session.

The market turnover decreased by 6.88 percent to 177.66 million shares as compared to 190.79 million shares traded in the previous session. The overall market capitalisation also declined by 0.64 percent to close at Rs 1.689 trillion as compared with Rs 1.700 trillion traded in the previous session. Out of 264 companies, 107 closed in positive zone, 146 in negative while 11 remained unchanged.

Analysts said mixed reactions were witnessed in the post-Monetary Policy announcement as low volumes were seen during the wee hours of trade, which soon invited accumulators and the index, after making a short visit to the red zone, soon recovered a bit. Besides the statement by Federal Board of Revenue, that due to the economic slowdown tax revenue targets may not be achieved signals more dependence on borrowing from the SBP. The views and statements will most probably keep the prospective investors eyeing the federal budget, value buying will continue on dips and smooth sailing will stay a post budget event. “High CFS rates also played havoc with the market.”

The day’s proceedings was marked by the profit-taking as the KSE 100 index opened in the negative zone and this trend remained prevalent throughout the trading session. The KSE 100 index opened in the red zone with a loss of 4.04 points and at the end of the day closed at 5,333.95 points with a loss of 43.47 points.

NIB Bank was the volume leader in the share market with 22.31 million shares as it closed at Rs 5.42 after opening at Rs 6.00 losing 58 paisas. OGDC traded 12.18 million shares as it closed at Rs 44.62 after opening at Rs 45.97 losing Rs 1.35. WorldCall Telecom traded 9.38 million shares as it closed at Rs 3.04 after opening at Rs 3.27 losing 23 paisas. NBP traded 8.80 million shares as it closed at Rs 57.56 after opening at Rs 56.57 gaining 99 paisas. Maple Leaf Cement traded 8.17 million shares as it closed at Rs 4.69 after opening at Rs 4.39 making a financial gain of 30 paisas.

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