Equity market falls by 295 points on policy rate hike

KARACHI: The equity market fell by 295 points on Monday owing to hike in discount rate by 50 basis points.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 38,355 points as against 38,650 points showing a decline of 295 points.
Analysts at Arif Habib Limited said that the market dipped today on the back of recent rate hike by SBP that increased the discount rate by 50bps to 10.75 percent.
As an aftermath, the stock prices adjusted downwards although the decision of rate hike was in line with expectation.
Exceptions to downward price adjustment were mainly banking sector, which has a positive correlation to interest rate hikes.
Volume was led by UNITY right, which has been in the limelight since last week. Other than that the volumes were generally seen in Bank, Cement and Power Sectors.
Sectors contributing to the performance include Power (+47 points), Miscellaneous (+22 points), Fertilizer (-83 points), E&P (-56 points), Banks (-56 points), Cement (-53 points), Pharma (-30 points).
Volumes declined significantly from 137.7 million shares to 65.9 million shares (-52 percent DoD). Average traded value also declined by 46 percent to reach US$ 19.9 million as against US$ 36.8 million.
Stocks that contributed significantly to the volumes include UNITYR1, BOP, SNGP, KEL and MLCF, which formed 47 percent of total volumes.
Stocks that contributed positively include HUBC (+72 points), PSEL (+23 points), BAFL (+7 points), EFUG (+7 points), and SYS (+6 points). Stocks that contributed negatively include PPL (-35 points), LUCK (-28 points), ENGRO (-28 points), BAHL (-25 points) and DAWH (-22 points).
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