PSX remains under pressure, falls over 1,000 points after SBP rate hike

KARACHI: The Pakistan Stock Exchange (PSX) stayed under pressure on Tuesday, with the benchmark KSE-100 Index continuing its downward move as investors reacted cautiously to the State Bank of Pakistan’s decision to raise the policy rate by 100 basis points.

According to market figures reported during the session, the benchmark index was at 168,337.56 as of 1:09am, down 1,159.79 points, or 0.68%.

Trading began in negative territory and the market remained in the red through the morning session, indicating cautious sentiment among investors. The weakness extended the bearish trend seen in the previous session as the market continued to absorb the impact of the central bank’s tighter monetary stance.

During intraday trade, the index touched a high of 169,313.90 and fell to a low of 168,170.74.

Market activity remained relatively strong despite the decline. Traded volume reached 341,059,243 shares, while the value of those trades stood at about Rs13.49 billion.

The selling pressure was linked to concerns over higher borrowing costs following the increase in the policy rate. Investors were reassessing positions as tighter monetary conditions are expected to weigh on corporate profitability and slow economic activity.

Interest-sensitive sectors were among the main laggards during the session, reflecting the market’s response to the central bank’s latest move.

Investor caution persists

The market remained fragile throughout the session, with stocks facing sustained pressure from the opening bell. The decline followed a visible rate-hike syndrome after the SBP’s tightening decision.

The overall trading environment was described as quiet, even as participation stayed active in terms of volume. Investors appeared to be taking a cautious approach while assessing the likely effect of the higher policy rate on listed companies and the broader economy.

The previous session had also ended lower amid anxiety over the rate increase, and Tuesday’s trading suggested that sentiment remained subdued.

Focus on further market direction

With trading still in progress at the time of the report, market participants were watching for further developments and institutional flows to assess where the session might eventually close.

The latest decline comes as the market adjusts to the implications of tighter monetary policy, with investors closely monitoring whether pressure on equities will persist in the near term.