{"id":12414,"date":"2022-11-28T11:40:14","date_gmt":"2022-11-28T11:40:14","guid":{"rendered":"https:\/\/dailyausaf.com\/en\/?p=12414"},"modified":"2022-11-28T11:40:14","modified_gmt":"2022-11-28T11:40:14","slug":"psx-takes-a-hammering-after-sbps-sudden-interest-rate-hike-to-highest-since-1999","status":"publish","type":"post","link":"https:\/\/dailyausaf.com\/en\/business\/psx-takes-a-hammering-after-sbps-sudden-interest-rate-hike-to-highest-since-1999\/","title":{"rendered":"PSX takes a hammering after SBP’s sudden interest rate hike to highest since 1999"},"content":{"rendered":"

The Pakistan Stock Exchange<\/a> (PSX) took a hammering at opening bell Monday morning in reaction to the State Bank of Pakistan’s (SBP) unforeseen hike Friday, while the market was closed, in the interest rate to 16% \u2014 the highest level since 1999.<\/p>\n

The benchmark KSE-100 index lost 707 points or 1.65% as soon as the trading week kicked off. The market was at 42,229 points at 9:39am. It had closed at 42,936.73 points at the last session on Friday.<\/p>\n

The market saw a brief recovery but it remained in the negative territory, with the bears continuing to dominate and taking the market down by 969 points at 2:19pm.<\/p>\n

Read more:\u00a0SBP hikes policy rate by 100bps to 16pc<\/a><\/strong><\/em><\/p>\n

Analyst Samiullah Tariq blamed SBP’s decision to increase the interest rate as a key factor for the drop in the KSE-100 index.<\/p>\n

“The market wasn\u2019t expecting a rate hike. That\u2019s why it is reacting,” the head of research at the Pakistan-Kuwait Investment Company told media.<\/p>\n

At the time the decision was announced the markets had closed, which is why the KSE-100 index went in the red at opening bell today.<\/p>\n

Capital market expert Saad Ali also blamed the “surprise interest rate hike” for the drop, adding that investors may be expecting more hikes given the inflation outlook.<\/p>\n

“Interest rates at 16% or higher is significantly negative for growth and corporate profitability,” Ali told media.<\/p>\n

SBP hikes interest rate to 16% to curtail inflation<\/strong><\/p>\n

On Friday, the Monetary Policy Committee (MPC) of the SBP raised the key policy rate by 100 basis points to 16% \u2014 the highest since 1999.<\/p>\n

The central bank, in a statement, issued after the meeting said that the decision reflects the MPC\u2019s view that inflationary pressures have proven to be stronger and more persistent than expected.<\/p>\n

“This decision is aimed at ensuring that elevated inflation does not become entrenched and that risks to financial stability are contained, thus paving the way for higher growth on a more sustainable basis,” the MPC said.<\/p>\n

The SBP noted that amid the ongoing economic slowdown, inflation is increasingly being driven by persistent global and domestic supply shocks that are raising costs.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Pakistan Stock Exchange (PSX) took a hammering at opening bell Monday morning in reaction to the State Bank of Pakistan’s (SBP) unforeseen hike Friday, while the market was closed, in the interest rate to 16% \u2014 the highest level since 1999. The benchmark KSE-100 index lost 707 points or 1.65% as soon as the […]<\/p>\n","protected":false},"author":8,"featured_media":12415,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,9,2],"tags":[3460,3461,572],"class_list":["post-12414","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-latest-news","category-pakistan","tag-pakistan-stock-exchange","tag-psx","tag-sbp"],"_links":{"self":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/12414","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/comments?post=12414"}],"version-history":[{"count":0,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/12414\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media\/12415"}],"wp:attachment":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media?parent=12414"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/categories?post=12414"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/tags?post=12414"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}