Stocks stage comeback, KSE-100 gains nearly 1pc
Stocks rebounded at the Pakistan Stock Exchange (PSX) following State Bank of Pakistan’s (SBP) decision to keep the interest rate unchanged, lending clarity to the market, as the benchmark KSE-100 gained nearly 1% during trading on Tuesday.
The market experienced sustained optimism throughout the day, with both the volume and value of shares traded surpassed that of the previous session.
At close, the benchmark index settled at 65,502.60 level an increase of 612.09 points or 0.94%. It hit its intraday high of 65,624.73 earlier in the session.
Across-the-board buying was witnessed with indexheavy sectors including autos, Oil and Gas Exploration Companies and OMCs settling in the green.
Experts attributed the bullish trend to the expected decision by the central bank to maintain status quo.
On Monday, the Monetary Policy Committee (MPC) of the SBP kept the key policy rate unchanged at 22%, its sixth successive decision to maintain the status quo. “In approaching the decision, the MPC noted that inflation, in line with earlier expectations, has begun to decline noticeably from H2-FY24,” it said in a statement on Monday.
“It, however, observed that despite the sharp deceleration in February, the level of inflation remains high and its outlook is susceptible to risks amidst elevated inflation expectations. This warrants a cautious approach and requires continuity of the current monetary stance to bring inflation down to the target range of 5–7% by September 2025.”
On Monday, the PSX’s benchmark KSE-100 closed nearly flat as the index swayed both ways ahead of the monetary policy announcement. The index settled at 64,890.51, up by only 74.04 points or 0.11%. Globally, Tokyo stocks rose on Tuesday after the Bank of Japan hiked interest rates for the first time in 17 years as it shifted away from its long-running ultra-loose monetary policy.
There were also gains in Sydney, Singapore, Taipei, Manila, Jakarta, Bangkok and Wellington. Hong Kong and Shanghai were down at the break, while there were also losses in Seoul and Mumbai. Investors are also gearing up for the Federal Reserve’s latest policy decision Wednesday.
While it is forecast to keep rates on hold at a twodecade high, it will release its “dot plot” outlook for the rest of the year, with the December report pointing to three cuts.
Meanwhile, the rupee remained largely stable against the US dollar in the inter-bank market on Tuesday. At close, the local unit settled at 278.64, down by Re0.01 against the greenback, as per the State Bank of Pakistan (SBP).