The Pakistan Stock Exchange (PSX) rallied strongly as the beginning of the week, with the KSE-100 index surging by over 1,000 points on investor optimism surrounding an anticipated policy rate cut by the State Bank of Pakistan (SBP).
The benchmark index advanced 1157.51 points, or 1.27%, rising to 92,017.36 points during the intra-day trade, up from the prior session’s 90,859.85 points.
The index had staged a rebound on Friday, ending 2.1% higher at 90,860, driven by robust foreign inflows totaling $5.4 million, while mutual funds shifted to net selling.
Market participants are eyeing the State Bank of Pakistan’s (SBP) Monetary Policy Committee meeting later today, anticipating a significant rate cut of 200-300 basis points, which could further buoy investor sentiment.
The market is witnessing a broad-based rally ahead of the MPC meeting today, Saad Ali, Intermarket Securities Director of Research, told Thenews.com.pk, in which the market is expecting up to a 200bps cut.
Pakistan-Kuwait Head of Research, Samiullah Tariq, echoed Saad’s views and added that optimism surrounding broader economic conditions also contributed to the market’s rise.
Meanwhile, the Intermarket Securities Director of Research said that the market is ignoring such negative news as the stalling of the PIA privatisation, delays in the launch of panda bonds and the IMF not allowing relaxation in tax targets.
In the MPC meeting, the State Bank and top officials of the banking sector will review the national economy and inform the nation about the national economic indicators.
The committee had reduced the policy rate from 22% to 20.5% on June 10, 2024 and reduced it by 1% to 19.5% in July. Further, on September 12, 2024, the State Bank reduced the policy rate from 19.5% to 17.5%.
This is a developing story and is being updated with more details.