Bloodbath on PSX as more than 2,100 points were erased from the KSE-100 Index

KARACHI: The Pakistan Stock Exchange (PSX) saw bloodbath in a turbulent trading day, some are calling ‘Black Thursday’, when a massive sell-off wiped more than 2,100 points from the benchmark KSE-100 index.

The sell-off marked the largest single-day drop in trading value on the PSX during calendar year 2021, and the third largest in history.

The 100 index opened at 45,369 points for a relentless slaughter. Investors dumped their positions and wiped out 2,135 points – about 4.7% – at the end of the day.

Cements bore the brunt of the sale, with Lucky, Maple Leaf, DG Khan and Cherat Cement all closing on their lower circuit breaker.

Technology, exploration and production and fertilizers did not perform better, causing the index to take a heavy blow.

Volumes were up 60% from a day earlier as investors panicked and rushed out of their positions. Of the 366 scrips traded that day, 335 closed in red.

Speak with geo.tvAlpha Beta Core CEO Khurram Schehzad said investor sentiment had been severely tarnished after a record number of imports.

“The import bill (trade deficit) exceeded market expectations, which shocked investors and they discharged inventories,” he said, explaining that a higher current account deficit raises expectations of a policy rate hike and a subsequent rise in costs. of doing business.

However, the analyst added that the current account deficit is expected to be contained in the coming months as oil prices in the international market have fallen significantly and food and energy supplies are expected to improve in the current six-month period. , increasing the current account deficit.

Meanwhile, BMA’s Capital Executive Director Saad Hashemy told: geo.tv that investors took a negative signal from T-bill auctions.

“The numbers, of the 3, 6 and 12-month T-bills [auctioned] were about 75-100 basis points higher than in secondary markets, leading to the carnage,” he said.

“Second, the higher-than-expected trade deficit added to negative sentiment,” the analyst said, adding that investors weighed the chances of a massive rate hike at the upcoming meeting of the State Bank’s Monetary Policy Committee this month.

“Going forward, the market is expected to consolidate as valuations are attractive,” he predicted.