Pakistan Stock Exchange (PSX) remained bearish for the third week in a row amid expected hike in interest rate, with the benchmark KSE-100 Index losing 408.60 points (-0.90 percent) to close at 44,840.81 points and leaving the market directionless for the week starting today (Monday). The benchmark index registered its ninth decrease in the last 10 sessions for a cumulative fall of nearly 3.7 percent. Overall, the benchmark index has lost 1,760 points during the last three weeks. The south-bound journey of the benchmark index continued as the Karachi Interbank Offered Rate (Kibor) reached a 14-year high of 14.1 percent in the preceding week. In addition, yields of treasury bills also hovered around 15pc after hitting a 22-year high. During the only working day of the outgoing week on Friday, stocks closed lower amid rupee instability and expectations for further increase in the interest rate. According to experts, the upcoming monetary policy is expected to be loaded with a rate hike up to 200bps. If it goes up by 200bps and banks add their charges of 2.50 percent or 2.75 percent, the interest rate would reach 16 to 17 percent, which is not feasible for any economy and any industry that runs on credit, they added. Another thing hitting the stocks is the balance of payments. Though the national exports have shown a significant increase but so did imports, which jumped by three to four times. The economy has been facing daunting challenges on fiscal and external deficits, coupled with elevated trade deficit and high oil prices mounting pressure on the central bank’s forex reserves. The fears of further deterioration in forex reserves held by the central bank are stoking economic uncertainties and demoralising investors. The market failed to find stimulus as there was no concrete outcome of the Prime Minister Shehbaz Sharif’s Middle East visit, while the departure of the central bank governor also weighed. The government decided not to extend the tenure of Dr Reza Baqir as State Bank of Pakistan (SBP) governor following the end of his three-year term. Subsequently, Dr Murtaza Syed assumed charge as acting governor until appointment of a new SBP chief. Similarly, headline inflation for April 2022 rose to 13.4 percent year-on-year and 1.6 percent month-on-month – the highest in about 27 months (since January 2020) – on the back of a higher than anticipated surge in the index of food prices and accelerating core inflation in both urban and rural areas. Other market-driving news stories during the week included Prime Minister Sharif constituted the Economic Advisory Council (EAC) that will review and formulate economic policies in a more holistic manner and advise on short-term macroeconomic stabilisation for stable and sustained economic progress. On the other hand, the Federal Board of Revenue (FBR) suffered a revenue shortfall of Rs5 billion during April 2022, as provisional revenue collection stood at Rs 480 billion during April 2022 against the assigned monthly target of Rs485 billion. Moreover, the global markets remained under pressure after the US rate hike, which also impacted the Pakistani market.