KSE falls 78 points on below expectation rate cut
Wednesday, 19 August 2009
KARACHI, Aug 18: The benchmark KSE 100 Index closed in the red zone with decrease of 78.76 points and closed at 7,932.55 levels. Intense selling was witnessed as investors reacted on limited easing in discount rate by 100bps in monetary policy announcement on August 15, according to Pak Tribune.
The market sentiments turned negative on the monetary policy, which was not up to the expectation. Market was expecting 150bps to 200bps discount rate but it was discounted by 100 bps. On the other hand cement cartel was broken and reduction in the cement prices has further forced the market sentiments to turn bearish on the cement sector.
However Moody's upgraded the currency rating and banking sector of the country from negative to stable that helped the market to recover and boosted the investors' confidence said Kashif Mustafa Head of Sales of Crosby Securities.
He added that market fundamentals are strong and foreign investment in the market is continuously increasing and on Monday $3.6 million foreign inflow was seen in the market.
The KSE 30 index closed at 8,408.93 with a loss of 118.68 points. KMI-30 index closed at 11,810.24 with a loss of 147.17 points. All shares index closed at 5,665.45 with a loss of 54.84 points.
Market capitalisation fell to Rs2.339 trillion as compare to Rs2.361 trillion in the last session. Hasnain Asghar Ali analyst at Aziz Fida Husein & Co. stated that 100bps decline for a demand of 200 bps, as expected got a negative response and the benchmark continued to melt, adding to the pressure was the official view that the local economy is likely to stay slow.
However increase in frequency of monetary policy announcement will keep the stakeholders on edge of their seats, with declining trend in inflation likelihood of frequent triple digit decline stays, expectations will invite fresh liquidity once the excess fat is burned.
The market sentiments turned negative on the monetary policy, which was not up to the expectation. Market was expecting 150bps to 200bps discount rate but it was discounted by 100 bps. On the other hand cement cartel was broken and reduction in the cement prices has further forced the market sentiments to turn bearish on the cement sector.
However Moody's upgraded the currency rating and banking sector of the country from negative to stable that helped the market to recover and boosted the investors' confidence said Kashif Mustafa Head of Sales of Crosby Securities.
He added that market fundamentals are strong and foreign investment in the market is continuously increasing and on Monday $3.6 million foreign inflow was seen in the market.
The KSE 30 index closed at 8,408.93 with a loss of 118.68 points. KMI-30 index closed at 11,810.24 with a loss of 147.17 points. All shares index closed at 5,665.45 with a loss of 54.84 points.
Market capitalisation fell to Rs2.339 trillion as compare to Rs2.361 trillion in the last session. Hasnain Asghar Ali analyst at Aziz Fida Husein & Co. stated that 100bps decline for a demand of 200 bps, as expected got a negative response and the benchmark continued to melt, adding to the pressure was the official view that the local economy is likely to stay slow.
However increase in frequency of monetary policy announcement will keep the stakeholders on edge of their seats, with declining trend in inflation likelihood of frequent triple digit decline stays, expectations will invite fresh liquidity once the excess fat is burned.