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The PSX (Pakistan Stock Exchange) recently dropped about 2% to about 42,000 points.
Traders panicked after the central bank unexpectedly raised interest rates by 100 basis points to his 16%, its highest in over two decades.
However, for listed companies, the development was negative as it reduced the flow of credit to the private sector, affecting net income.
Topline Securities CEO Muhammad Sohail said, “The market is down 650 points at the opening price after an unexpected rate hike.” Activity may stabilize gradually.
However, the current rate hike could have further impacts on economic activity.