PSX reacts to surprise rate hike, plunges over 800 points

The Pakistan Stock Exchange’s benchmark KSE-100 index plunged over 800 points on Monday, with the slump being attributed to the central bank’s surprise move to hike the policy rate by 100 basis points on Friday evening. The index saw a sharp slump right after the opening bell, dropping more than 600 points to 42,282.48 in the first 30 minutes of trading. It eventually closed at 42,071.34, down 865.39 points or 2.02pc. Head of Research at Intermarket Securities, Raza Jafri, said the market had opened sharply negative as it factored in higher interest rates and continued uncertainty on the political front after Imran Khan’s threat to dissolve the Punjab and Khyber Pakhtunkhwa assemblies. “Support may come in later on, as positives such as Pakistan’s intent to repay its maturing Sukuk ahead of schedule and the end to the long march, which risked street confrontation,” he added. First National Equities Limited Director Amir Shehzad also said the market was under pressure due to the “unexpected” increase in the policy rate by 100 basis points.