Stocks dive for second week amid terrifying interest rates

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Pakistan Stock Exchange (PSX) remained bearish for the second week in a row amid expected hike in interest rate, with the benchmark KSE-100 Index shedding 303.61 points (-0.67 percent) to close at 45,249 points.

Overall, the benchmark index has lost 1,352 points during the last two weeks. Despite a positive start last week, the PSX failed to sustain the bullish momentum and succumbed to profit-taking primarily owing to the dismal macroeconomic cues. The PSX recovered as many as 520 points in the first trading session of the outgoing week, thanks to the positive news trigger relating to the resumption of the International Monetary Fund (IMF) loan programme. The upward movement, however, was short-lived.

The north-bound journey of the benchmark stopped in the next few sessions when the Karachi Interbank Offered Rate or Kibor reached a 14-year high of 14.1 per cent. In addition, yields of treasury bills also hovered around 15pc after hitting a 22-year high. As a result, the average daily turnover witnessed growth of 25.6 percent on a week-on-week basis to 282.1 million shares.

Other market-driving news stories during the week included the current account deficit swelling to $13 billion in the July-March period, nine-month IT exports increasing 29.3 percent to $1.9 billion, Finance Minister Miftah Ismail holding talks with key global investors, allocation of portfolios to six cabinet members and the nine-month fiscal deficit widening to Rs2.6 trillion or 4 percent of GDP..87 million).—TLTP