Investors lost billions of rupees after the Pakistan Stock Exchange plunged more than 1,800 points on Thursday. The market has been in a deep slump since the beginning of the fourth day of the business week.
Due to the decline in the market, the share prices of many companies also fell while new investors were reluctant to enter the market and the index fell below the psychological level of 44,000.
Reasons for ‘bearish trend’
According to well-known economist and analyst Muhammad Farhan, the index could not maintain the psychological threshold of 44,000 points on December 14 due to fears of a rise in interest rates on monetary policy by the SBP, mainly due to rising inflation which has reached 11.5 percent.
According to the November Inflation Index, the inflation rate in the country last month was 11.5 percent which is many times higher than our expectation. He said that economists had hoped for less than 9 percent inflation but due to the lack of any significant measures by the government, the inflation rate in the country could not be controlled.
Market’s trend
The Pakistan Stock Exchange returned sharply by 296.76 points during trading on Wednesday and the 100 Index closed at 45369.14 points. Investors also showed interest in trading. During the entire trading day, the business saw an improvement of 0.66 percent while 889.29 million 192 shares were traded.
A day earlier on Tuesday, the market was in a slump, the KSE-100 index fell 200 points, causing the index to fall from 45,300 points to 45,000 points. Earlier, on the first day of the business week, due to the sharp rise in the stock market, investors gained billions of rupees and the psychological limit of 45,000 was restored.
Omicron variant’s symptoms
Investors in the market have been cautious due to fears of a new wave of coronavirus in the country, Omicron, and a wait-and-see policy is being implemented. Investors have observed that due to Omicron, the chain of sanctions has started again all over the world and in Pakistan also investors are adopting a cautious attitude due to the fear of sinking of capital in case of sanctions due to which the volume in the market is decreasing.
Damage and recovery
Investors in the stock market lost billions of rupees due to the loss of more than 1800 points in the initial session while the chances of an improvement in the market are limited until a clear position is taken by the government, the recovery of the market is possible if the government immediately announces to address the concerns.
