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% on Tuesday.
The market experienced sustained optimism throughout the day, with both volume and value of shares traded higher than that of the previous session.
At close, the benchmark index settled at 65,502.60, an increase of 612.09 points or 0.94%. It hit its intra-day high of 65,624.73 earlier in the session.
Across-the-board buying was witnessed with index-heavy 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 were also gearing up for the Federal Reserve’s latest policy decision Wednesday.
While it is forecast to keep rates on hold at a two-decade 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).
Volume on the all-share index increased to 323.28 million from 211.75 million a session ago.
The value of shares rose up to Rs17.06 billion from Rs7.78 billion in the previous session.
WorldCall Telecom was the volume leader with 27.82 million shares, followed by Telecard Limited with 20.83 million shares, and Bank of Punjab with 17.91 million shares.
Shares of 341 companies were traded on Tuesday, of which 184 registered an increase, 140 recorded a fall, while 17 remained unchanged.
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