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Bearish momentum dominated the Pakistan Stock Exchange (PSX) on Monday as shares declined by 500 points in intraday trade.
Shortly after the opening bell, the index breached the 73,000 barrier to trade at a record high of 73,300 before plummeting.
However, the index declined by 506.70 points, or 0.7 per cent, to stand at 72,236.04 points at 12:27pm from the previous close of 72,742.74.
Mohammed Sohail, chief executive of Topline Securities, stated that after last week’s 5pc rally, investors chose to book profits today.
“Moreover there is uncertainty in whether or not the State Bank of Pakistan (SBP) will reduce the rates,” he said.
The State Bank of Pakistan (SBP)’s monetary policy committee (MPC) will meet today to take a decision regarding the key interest rate policy. Last month, the committee had chosen to maintain the status quo by upholding the key policy rate at 22 per cent for the sixth policy meeting in a row.
Tahir Abbas, head of research at Arif Habib Limited, said, “The market is taking some correction ahead of the monetary policy announcement later today.”
He observed that different surveys suggested “a clear divide of 50-50pc” on expectations of a rate cut.
Awais Ashraf, director of research at Akseer Research, noted that the downward trajectory indicated “a cautious stance among investors ahead of the MPC announcement, amid divided expectations regarding a potential rate cut.”
“Additionally, disappointing results from Mari Petroleum and reduced cash payouts from Hub Power Company also contributed to the downward pressure on the index,” he added.
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