The stock market endured a battering on Monday as the KSE-100 index nose-dived over 1,000 points on the back of soaring Covid-19 cases across the country coupled with the anticipation of stringent measures of the government in wake of resumption of the IMF program.
In the past few days, Punjab has been the worst hit from the calamity and market participants are now expecting a lockdown in the province. Since the province is a major contributor to the economy, a lockdown is likely to impact the market.
The province reported 2,823 cases of fresh infections on Sunday which raised alarms among major sectors of the economy as well as the stock market.
Endorsing his views, MAFA Capital CEO Adnan Agar said skyrocketing Covid infections and the looming fear of lockdown in Punjab dented investor sentiments at the bourse on Monday.
Reportedly, another factor leading to the decline is the approval of a presidential ordinance that will end corporate tax exemptions for major sectors of the economy.
At 4:40 PM, the KSE-100 was suspended at 44,431.80 after plunging of -1089.83 points or -2.39%.
On the other hand, the rupee has gained an additional 42 paisa against the US dollar. The dollar was being quoted at 154.15/154.20 (11:30 PST) on Monday compared to Friday’s closing value of Rs154.58.
The US dollar had lost 42 paisa against the rupee on Friday in the interbank market as currency experts believed that the downward trend would continue, and the greenback would soon reach the pre-Covid level.
The dollar has depreciated more than 7.5 percent against the rupee since August 2020.
Some believe it is due to higher inflows of dollars are greater than the outflows for the 8MFY21.
However, other people in the market believe that the depreciation was witnessed since the demand for dollars from importers had slowed down.
No predictions are coming on how much more appreciation will happen, but it is a fact that overseas Pakistanis send more money to the home country during the holy month of Ramazan in the form of charity or zakat to the local organizations.