KSE-100 rallies over 600 points after MPC announcement

Investors saw a return of positivity at the Pakistan Stock Exchange (PSX) as the benchmark KSE-100 Index settled with a gain of over 600 points, while volume and value of shares improved from the previous session on Tuesday.

The market opened on a positive note and continued to make strides throughout the session.

At close on Tuesday, the benchmark index settled with a gain of 612.06 points or 1.59% at 39,055.65 level.

Experts attributed the positivity to the policy rate hike announced by the central bank on Monday, which was largely in line with market expectations.

Across the board buying was witnessed as index-heavy sectors including automobile, cement, chemical, commercial banks, and oil & gas marketing companies closed in the green.

KSE-100 closes marginally upward ahead of monetary policy announcement

On Monday, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) announced an interest rate hike of 100 basis points, taking it to 17%. This is the highest level of the key policy rate since October 1997.

“The committee noted that inflationary pressures are persisting and continue to be broad-based. If these remain unchecked, they could feed into higher inflation expectations over a longer-than-anticipated period. The MPC stressed that it is critical to anchor inflation expectations and achieve the objective of price stability to support sustainable growth in the future,” stated the MPC.

Moreover, the central bank, in order to clear the stuck consignments at ports, advised banks to provide one-time facilitation to all those importers who could extend their payment terms to 180 days or arrange funds from abroad to settle their pending import payments.

Capital Stake, in its report, said indices accumulated gains all day long while volumes grew from the previous session.

“The decision to increase policy rate upto 17% helped put investors at ease as the new rate was lower than estimated,” read the report.

On the economic front, Pakistani rupee continued to fall against the US dollar for the 25th consecutive session as it depreciated or Re0.25 or 0.11% in the inter-bank market to close at 230.40.

Sectors driving the benchmark KSE-100 index upwards included, oil and gas explorations (98.31 points), fertiliser (88.73 points) and cement (81.71 points).

Volume on the all-share index increased to 179.8 million from 81.3 million on Monday. The value of shares rose up to Rs6.4 billion from Rs2.8 billion recorded in the previous session.

Pak Petroleum Limited was the volume leader with 13.16 million shares, followed by Maple Leaf with 12.49 million shares and WorldCall Telecom with 11.87 million shares.

Shares of 326 companies were traded on Tuesday, of which 225 registered an increase, 74 recorded a fall and 27 remained unchanged.