KSE-100 closes 1.2% higher in anticipation of monetary policy announcement

The Pakistan Stock Exchange (PSX) continued its merry run as its benchmark KSE-100 Index closed 1.2% higher ahead of the monetary policy announcement on Monday.

A positive open to the day was followed by additional buying momentum that even pushed the index beyond 92,000 for the first time in history. Some level of profit-booking trimmed intra-day gains, but a final-hour buying push took the KSE-100 close to the 92,000 level again.

At close, the benchmark index settled at 91,938.01, up by 1,078.15 points or 1.19%.

Buying was observed in key sectors including automobile assemblers, cement, chemical, commercial banks, fertilizer, oil and gas exploration companies and OMCs. Index-heavy stocks including OGDC, PPL, SNGP, SSGC and HCAR traded in the green.

The buying momentum came on the back of expectations of another cut in the key policy rate.

In its decision that was announced after the market closed, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) on Monday reduced the key interest rate by 250 basis points, taking it to 15% after a fourth successive round of monetary easing that began in June 2024.

Some positive corporate results and improved economic indicators also drove optimism.

The country reported its first-ever quarterly budget surplus in over 20 years of Rs1.7 trillion during the first quarter of FY25, but some concerns exist over tax authorities missing their target.

During the previous week, the PSX witnessed a bullish trend on the back of investor interest mainly in blue chip oil and gas sector stocks. The benchmark KSE-100 index surged by 865.88 points weekly and closed at 90,859.85 points.

Globally, South Korean shares rose on Monday as the country’s opposition Democratic Party leader agreed to support the government’s move to scrap a scheme to tax profits on stock investments. The won strengthened, while the benchmark bond yield rose.

The benchmark KOSPI was up 39.24 points, or 1.54%, at 2,581.60, as of 02:46 GMT.

Meanwhile, Australian shares climbed on Monday after a three-session slide, with investors awaiting a central bank policy meeting later in the week for further direction.

The S&P/ASX 200 index inched 0.3% higher to 8,138.9 by 1133 GMT. The benchmark fell 1.1% last week in its worst week in nearly three months.

Meanwhile, the Pakistani rupee registered a marginal decline against the US dollar, depreciating 0.03% in the inter-bank market on Monday. At close, the currency settled at 277.79, a loss of Re0.09 against the greenback.

Volume on the all-share index increased to 589.55 million from 465.86 million on Friday.

The value of shares also rose to Rs29.96 billion from Rs23.09 billion in the previous session.

Power Cement was the volume leader with 56.70 million shares, followed by K-Electric Ltd with 38.93 million shares, and Maple Leaf with 36.96 million shares.

Shares of 445 companies were traded on Monday, of which 258 registered an increase, 140 recorded a fall, while 47 remained unchanged.