Stocks post seventh fall in row despite rate cut

Despite a rare overnight interest rate cut, the market failed to regain confidence as investors engaged in profit-taking. This led to the seventh straight loss, causing the KSE 100 index to settle below 73,000 on the eve of the federal budget.

Ahsan Mehanti of Arif Habib Corporation told Dawn that the market remained bearish on a dovish SBP policy rate cut despite a thin inflation outlook to seek a $6-8 billion new IMF programme. “The capital market expects a wider rate cut in coming months, and PSX outperformed upon CPI inflation falling to 11.7pc for May,” he added.

Also, he said stocks fell on concerns over uncertainty over rollover terms of $15bn in China IPP dues, expected tough taxation measures in the budget, surging power tariffs that would impact industrial exports, a weak rupee, and growing concerns over unresolved Rs5.3tr circular debt, contributed to the bearish close.

Topline Securities Ltd said the PSX witnessed another volatile session. The negative trajectory was primarily influenced by companies such as Systems Ltd, Meezan Bank Ltd, Mari Petroleum, Oil and Gas Development Company and Engro Corporation, collectively lost 280 points.

As a result, the benchmark index settled at 72,589.49 points after tumbling by 663.07 points or 0.91pc on a dayon-day basis. However, the overall trading volume edged up 6.22 per cent to 372.53 million shares. The traded value also rose by 14.43pc to Rs11.65bn day-on-day.

Foreign investors remained net sellers as they sold shares worth $0.23m.