Selling pressure persisted at the Pakistan Stock Exchange (PSX), as the benchmark KSE-100 Index lost nearly 1,400 points during intra-day trading on Tuesday.
At 11:45am, the benchmark index was hovering at 112,108.67, a decrease of 1,411.65 points or 1.224.
Selling was seen on Tuesday in key sectors including oil and gas exploration companies, OMCs, power generation, refinery and commercial banks.
Index-heavy energy stocks traded in the red, including HUBCO, MARI, OGDC, PPL, PSO, SHEL, SSGC and SNGPL.
The market sentiment follows the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) reducing the key policy rate by 100 basis points to 12%. This marked the sixth successive cut since June 2024 when the rate stood at 22%.
“At its meeting today, the MPC decided to cut the policy rate by 100 bps to 12%, effective from January 28, 2025,” the MPC said in a statement on Monday.
“The Committee noted that inflation continued to trend downward in line with expectations, reaching 4.1% y/y in December. This trend is driven by moderate domestic demand conditions and supportive supply-side dynamics, amidst favourable base effect.
“Inflation is expected to come down further in January before inching up in the subsequent months. The Committee also noted that core inflation, while continuing to ease, is still at an elevated level.”
On Monday, PSX witnessed selling pressure, with its benchmark KSE-100 Index closing lower by 1,360 points at 113,520.32, as investors remained cautious despite an expected rate cut in the key policy rate.
Internationally, US stock futures steadied, the dollar ticked higher and tech stocks in Asia slid on Tuesday following a wave of selling as apparent advances by a Chinese AI startup cast doubt on US dominance and spending in one of the market’s hottest sectors.
Overnight, chipmaker Nvidia tab dived 17%, wiping off nearly $593 billion in the biggest market capitalisation loss in history.
Nvidia stock was up slightly in after-hours trading. Nasdaq 100 futures rose 0.1% and S&P 500 futures were broadly flat.
Nvidia supplier Advantest was down 10% in Japan on Tuesday, taking losses for the week so far to nearly 19%.
Further sharp falls occurred for AI-backer SoftBank Group, down 5.5%, and data-centre cable maker Furukawa Electric, down 8%. Both had already fallen heavily on Monday, with SoftBank now 13% lower after two days and Furukawa down 20%.
Data centre landlords tumbled in Australia. Tech-heavy markets in Taiwan and South Korea were closed for a holiday.
Nvidia accounted for most of the 3% drop in the Nasdaq on Monday though selling extended from Tokyo to New York and hit everything with a slice of the AI supply chain, from cable makers to data centres, power utilities and software firms.
The CBOE Volatility Index known as Wall Street’s fear gauge, leapt and safe-haven assets such as government bonds, the yen and the Swiss franc all rallied.
This is an intra-day update
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