Pakistan’s benchmark stock index, the KSE-100, faced pressure during intraday trading on Tuesday, closing at 188,001.04 points at 12:00pm PKT, down 586.62 points or 0.31 percent from Monday’s close of 188,587.66 points.
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The index reached an intraday high of 189,521.32 points in early trading before slipping to a low of 187,918.79 points. Trading volumes remained moderate, with 141.88 million shares exchanged at a market value of Rs18.73 billion.
Market analysts attributed the subdued performance to the State Bank of Pakistan’s (SBP) surprise announcement to maintain the key policy rate at 10.5 percent, rather than reducing it.
Industry leaders and traders had anticipated a rate cut. Arif Habib Limited noted that the SBP was expected to lower the policy rate by 75 basis points, potentially bringing it to 9.75 percent, a move that could have signalled a return to single-digit interest rates.
FPCCI President Atif Ikram Sheikh echoed market sentiment, saying the business community had requested a reduction of 350 basis points to bring the rate down to 7 percent, aiming to alleviate the strain of high energy tariffs and borrowing costs on industry.
The banking sector largely mirrored the market trend, with most listed banks trading lower. Exceptions included Bank of Khyber, JS Bank Ltd, Samba Bank, and United Bank, which managed to hold steadier.
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Analysts suggest that the market may continue to see volatility as investors adjust expectations in response to the SBP’s monetary stance, balancing growth concerns against inflationary pressures.