PSX remains under pressure as rate hike keeps investors cautious

The Pakistan Stock Exchange (PSX) continued to remain under bearish pressure on Tuesday as investor sentiment weakened following the State Bank of Pakistan’s recent policy rate hike.

The market opened in negative territory and extended losses throughout the trading session, reflecting ongoing uncertainty after the central bank raised the policy rate by 100 basis points. Analysts say the decision has triggered concerns over higher borrowing costs, which may affect corporate earnings and overall economic activity.

As of 1:09pm, the benchmark KSE-100 Index stood at 168,337.56 points, showing a decline of 1,159.79 points or 0.68%. Despite brief recovery attempts, the market failed to gain momentum and continued to trade in the red during the morning session.

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During intraday trading, the index touched a high of 169,313.90 points before dropping to a low of 168,170.74 points, indicating volatility and cautious investor behaviour. Market participation remained strong, with total volumes recorded at over 341 million shares and a traded value of approximately Rs13.49 billion.

Market experts believe that the ongoing sell-off is largely driven by interest-rate sensitivity, as sectors dependent on financing costs come under pressure. Investors are reportedly reassessing their positions in response to tighter monetary conditions and rising economic uncertainty.

Overall sentiment remains fragile as the market continues to digest the impact of monetary tightening. Traders are closely watching institutional activity and macroeconomic signals to determine the next direction of the market.

Until clarity emerges on inflation trends and future monetary policy, analysts expect volatility and cautious trading to persist in the near term.