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Pakistan Stocks Drop 4.5% for the Week as Oil Shock and Rate Hike Bite

Investors now look to an IMF board review on May 8 for a $1.2 billion lifeline.

Overview

  • The KSE-100 lost 7,677 points to close at 162,994 for the week, swinging between a high of 171,306 and a low of 160,391.
  • Brokerage notes tied the selloff to U.S.–Iran tension that drove Brent crude near $126 a barrel after reported Strait of Hormuz disruptions.
  • The State Bank lifted its policy rate by 1 percentage point to 11.5% on April 28 to counter inflation pressures from pricier fuel.
  • Government debt sales showed stress as T-bill yields jumped and Rs1.37 trillion was sold, while all long-term bond bids were rejected.
  • Power-sector arrears, known as circular debt, rose to Rs1.84 trillion, a burden that can feed higher electricity bills and more frequent outages.