KARACHI: Selling pressure continued at the Pakistan Stock Exchange (PSX) on Tuesday, with the benchmark KSE-100 Index falling by nearly 1,500 points.

The index hit an intra-day low of 111,434.95 before closing at 112,030.36, a decline of 1,489.96 points or 1.31%. The market sentiment was impacted by the recent 100 basis point cut in the key policy rate by the State Bank of Pakistan's (SBP) Monetary Policy Committee (MPC), which reduced the rate to 12%.  This marked the sixth consecutive rate cut since June 2024. The MPC's decision to lower the policy rate came as inflation continued its downward trend, reaching 4.1% year-on-year in December.

While inflation is expected to decrease further in January, it is anticipated to rise again in the following months. Despite easing inflation, core inflation remains elevated. The previous day, the PSX also faced selling pressure, with the KSE-100 Index falling by 1,360 points, closing at 113,520.32, as investors remained cautious in light of the expected rate cut. Globally, US stock futures stabilized while the dollar ticked higher. Tech stocks in Asia slid, particularly after Chinese AI advancements raised concerns about US dominance in the sector.

Chipmaker Nvidia saw a dramatic 17% drop, wiping out nearly $593 billion in market value, contributing to the broader market selloff. The Nasdaq and S&P 500 futures showed mixed movements, with volatility rising across global markets.