Pakistan's Karachi Stock Exchange-100 nosedives over 2,100 points

The Pakistan Stock Exchange on Thursday saw a massive fall as the benchmark Karachi Stock Exchange (KSE)-100-index shed more than 2100 points.

The Pakistan Stock Market saw a massive selling pressure as the slide began soon after the opening at 45,369.14 points, with the benchmark KSE-100 index down 2,005 points, or 4.42 per cent, by 1:30pm (local time). The benchmark index closed the day at 43,234.15, down 2,134.99 points, or 4.71pc.

Financial experts put down the massive selling spree to the widening trade deficit as the reason for the plunge.

Intermarket Securities' head of equities Raza Jafri said that the widening trade deficit was the reason behind the plunge and added that it will keep the rupee under pressure and lead to ''aggressive'' increases in the interest rate.

Jafri said the stock market should recover as the government has started macro-course correction while global commodities are coming down due to Omicron (the new variant of the coronavirus).

The CEO of Topline Securities, Mohammad Sohail, said the ''shocking'' import bill in November, coupled with the central bank's ''aggressive borrowing'' in Wednesday's T-bill auction were behind the nosedive.

As per the PSX Rulebook if the index goes five per cent above or below its last close and stays there for five minutes, trading in all securities is halted for a specified period.

The hike in the interest rate by 125 basis points by the State Bank of Pakistan (SBP) during the auction of T-bills was also increasing investors' problems, he said.

The US dollar has soared to Rs 176.30 in the interbank market after gaining Rs one in value on Thursday.

A day earlier, the government released provisional data that showed the trade deficit increased by 162.4pc in the month of November mainly due to a triple increase in imports compared to exports from the country.

Earlier this week, data released by the Pakistan Bureau of Statistics showed inflation had risen to 11.5pc from 9.2pc, the highest increase noted in the past 20 months influenced by a record hike in fuel prices in October.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)