KARACHI: As widely anticipated, the KSE-100 plunged on Friday, losing over 600 points in intra-day trading as investors chose to book profits coinciding with a negative review on Pakistan’s economy.
Ratings agency Fitch downgraded the outlook on Pakistan’s long-term foreign and local currency issuer default ratings to negative from stable and affirmed ‘B’ rating for both the categories. The assessment is one of the tools global investors use to judge an economy.
In response, investors opted to book gains at the Pakistan Stock Exchange (PSX), pushing the KSE-100 – a benchmark for market performance – to retreat almost 1.4% to near the 44,200 level. By 11:00am, an hour and a half into the session, the KSE-100 was down 582.11 points or 1.30% to hover around the 44,235 mark. It closed at 44,816.71 points on Thursday.
Stocks across the board witnessed selling pressure with index-heavy bank, cement and oil shares bearing the brunt of profit-booking.
Analysts say the retreat of the benchmark-100 share index is not surprising since a correction was in the offing after a gain of over 15% in a month.
The index has been on an upward trek since mid-December as political uncertainty settled, giving renewed zeal to investors to inject money after the PSX ended as the world’s worst market in 2017.