Stocks slump amid policy rate uncertainty

Pakistan Stock Exchange (PSX) on Monday came under heavy selling pressure as the KSE-100 index slumped nearly 1,050 points amid uncertainty surrounding the State Bank of Pakistan (SBP)’s policy rate announcement ahead of new loan talks with the International Monetary Fund (IMF). Although trading began on a positive note, reflecting the sharp gains recorded in the previous session, market sentiment turned bearish as the day progressed. The index touched its intra-day high of 73,300.75 in the first hour and from that point onwards it experienced a consistent downward trend. Institutional profit-taking in certain overbought stocks and expectations of structural reforms, particularly by doing away with government subsidies in energy, fertiliser and gas sectors as part of a new IMF programme, contributed to the bearish momentum.