KSE-100 closes over 1% higher as rate cut talks heat up

The Pakistan Stock Exchange (PSX) witnessed a bullish session on Thursday as its benchmark KSE-100 Index rebounded with an over 1% gain amid talks of a rate cut in the next Monetary Policy Committee (MPC) meeting expected in January.

Trading at the KSE-100 remained range-bound in the first half of the session, but bulls managed to dominate by the end, bringing the index back over 64,000.

At close, the benchmark index settled at 64,617.57, up by 697.72 points or 1.09%.

The turnaround comes after the KSE-100 saw some profit-taking and consolidation in the previous sessions.

On Wednesday, investors chose to opt for profit-taking in selective stocks of banks and fertiliser sectors in the backdrop of increasing noise at the political front and absence of any positive trigger, making a 5th consecutive negative session at the PSX.

Sentiments got a boost after the federal government borrowed Rs283 billion in the Market Treasury Bills auction held on Wednesday, with analysts saying investors aggressively tried to lock in rates at higher yields amid expectation of a rate cut in the next Monetary Policy Committee (MPC) meeting expected by Jan-end.

The State Bank of Pakistan (SBP), however, has not issued an advance calendar of its monetary policy committee meetings. When contacted by Business Recorder, the SBP acknowledged that it had yet to publish the monetary policy committee schedule.

At the PSX, a mixed trend was witnessed on Thursday, with index-heavy sectors including cement, chemical, commercial banks, oil and gas exploration companies and OMCs trading in the green, while the refinery and automobile sectors were trading in red.

Investors remained interested in the energy sector, especially in OMCs and oil exploration companies.

In a key development, the Ministry of Energy’s Directorate General of Petroleum Concessions (DGPC) also provisionally awarded four new exploration blocks in Balochistan and Sindh to Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Pakistan Oilfields Limited (POL).

Meanwhile, Mari Petroleum Company Limited (MARI), one of the largest producers of natural gas in the country, has discovered gas reserves at Shewa-2 well, located in North Waziristan district Khyber Pakhtunkhwa.

Globally, Asian stocks rose on Thursday ahead of US inflation data that could influence the Federal Reserve’s thinking on rate cuts, while the crypto world got a boost after exchange-traded funds (ETFs) to track bitcoin were approved in the United States.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.67% higher, on course to snap its seven-day losing streak.

Meanwhile, the Pakistani rupee maintained its positive momentum against the US dollar for the seventh consecutive session, appreciating a marginal 0.01% in the inter-bank market on Thursday. As per the State Bank of Pakistan, the local currency settled at 281.11 after an increase of Re0.02 against the greenback.

The blue-chip CSI 300 Index edged higher in early trading, while Hong Kong’s Hang Seng Index rose 1.5%.

Volume on the all-share index decreased to 586.5 million from 636.1 million a session before.

The value of shares declined to Rs17 billion from Rs18 billion in the previous session.

K-Electric Ltd was the volume leader with 198.5 million shares, followed by P.I.A.C.(A) with 33.9 million shares, and Pak Int.Bulk at 27.4 million shares.

Shares of 360 companies were traded on Thursday, of which 204 registered an increase, 131 recorded a fall, while 25 remained unchanged.