Carnage at PSX: More than 2,000 points lost in intraday trading

Carnage at PSX: More than 2,000 points lost in intraday trading

 Pakistan  Pakistan

The Pakistan Stock Exchange

(PSX) witnessed a bloodbath on Thursday, with the benchmark index going down by 1,936 points during intraday trading.

Traders cited the broadening trade deficit as the reason behind the plunge, adding that it will lead to an “aggressive” spike in the interest rate and keep the rupee under pressure. Traders said that the trade deficit was beyond the market expectation, coming as a shock to the investors who offloaded stocks. It merits mentioning that a higher current account deficit has a subsequent impact on the cost of doing business and increases the expectation of a hiked policy rate.

“The higher-than-expected trade deficit fueled the negative sentiment,” an analyst said, adding that investors forecast the chances of a massive price hike across the country.

If the day’s trend and pressures persist, the PSX might be compelled to halt for the day as a cool-off step to avoid a larger collapse.

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According to experts, the ‘market halt’ will be announced if the KSE-30 index declines by more than 5pc and the decline does not roll back within five minutes of doing so.

As per the PSX Rulebook, if the index goes 5pc above or below its latest close and stays there for five minutes, trading activities in all securities is stopped for a specified period.

On the other hand, the Pakistani rupee struck gains against the US dollar.

The local unit spiked by three paisas to Rs175.45. The rupee finished at Rs175.48 after surging by 24 paisas against the US dollar in the interbank market yesterday.

However, the US dollar is currently trading at Rs176.50 against the Pakistani currency in the open market.

Some analysts said that the current account deficit would be contained in the coming months as oil prices have dropped significantly in the international market, reducing the current account deficit of Pakistan.

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