The Pakistan Stock Exchange endured a heavy battering on Monday, as the benchmark KSE-100 index plunged 744 points and dived below the 46,000 point level.

Higher than expected surge in the benchmark interest rate, of 150 basis points, took a toll on the trading environment and even the much awaited International Monetary Fund’s approval for disbursement of next loan tranche failed to uplift the investor sentiments.

Bears were seen haunting the market throughout the day, as jittery investors offloaded their positions amid massive foreign selling. Index heavy automobile, fertiliser, cement, oil and financial sectors bore the brunt of across the board profit taking and closed mostly with losses.

Even the news flow of fresh appreciation in rupee against the US dollar was downplayed by the market participants as they resorted to sell off their holdings.

Earlier, trading began with a brief rally and the market powered past 46,600 point mark in the initial hour. However the index was unable to sustain the uptrend and it dipped on the back of widespread profit-taking and remained in the negative territory for the rest of the session.

At close, the benchmark KSE-100 index recorded a decrease of 744.41 points, or 1.6%, to settle at 45,745.

A report from Arif Habib Limited stated that the bears ruled over the bulls on Monday as investors were unable to digest the higher than expected interest rate increase.

The beginning of the roll-over week witnessed bearish momentum despite the long awaited news that Pakistan and the International Monetary Fund (IMF) have reached a staff-level agreement.

Firstly, only cyclical stocks came under the radar and investors started offloading positions. Later on, a bloodbath session was witnessed as selling came across the board.

On the institutional front, cautious stance was noted due to the concerns of foreign selling spree.

Sectors contributing to the performance include cement (-184 points), technology (-153 points), exploration and production (-90 points), fertiliser (-70 points) and textile composite (-36 points).

JS Global analyst Waqar Iqbal said that the KSE-100 index went up by 112 points during the intra-day trading, however, it failed to sustain the positive momentum.

Two major announcements were made over the weekend ie 1.5% hike in interest rate and Pakistan reaching staff level agreement with the IMF.

“Realisation of the IMF money with the Saudi assistance package is expected to provide a reason for the market to rebound,” the analyst said.

Overall trading volumes declined to 261.9 million shares compared with Friday’s tally of 304.21 million. The value of shares traded during the day was Rs10.94 billion.

Shares of 344 companies were traded. At the end of the day, 70 stocks closed higher, 263 declined and 11 remained unchanged.

TRG Pakistan Limited was the volume leader with 22.37 million shares, losing Rs7.74 to close at Rs95.51. It was followed by Byco Petroleum with 21.6 million shares, losing Rs0.21 to close at Rs6.83 and TPL Properties XB with 15.8 million shares, losing Rs0.83 to close at Rs49.46.

Foreign institutional investors were net sellers of Rs1.68 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.