KSE-100 closes nearly 1% higher amid rate cut hopes, settles at record high of 73,799

The Pakistan Stock Exchange (PSX) witnessed a bullish session on Monday as its benchmark KSE-100 closed nearly 1% higher amid hope of a cut in the policy rate and expectations for a new International Monetary Fund (IMF) bailout programme.

The KSE-100 started the week’s first session on a strong buying spree that led the index beyond 74,000 for the first time in history.

However, the KSE-100 was uable to sustain the level due to some late-session selling but still closed at a record high.

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At close, the benchmark index settled at 73,799.11, up by 713.61 points or 0.98%.

“Positive vibes from the IMF rejuvenated foreign interest at attractive valuations and continuous progress on macro front could likely be accredited to this achievement,” brokerage house Topline Securities said in its post-market report.

Investors chose to further strengthen their equity position by buying blue-chip stocks across the board, it added.

Across-the-board buying was witnessed in key sectors including automobile assemblers, construction, chemical, oil and gas exploration companies, OMCs and refinery. Index-heavy stocks including Lucky Cement, Engro, PSO, and SNGPL were in the green.

Another brokerage house Arif Habib Limited in its report earlier during the day had said that the upward momentum was anticipated to carry it onward 73,600. “Should it breach 73,600, attention would then shift towards the range of 74,000,” it had added.

Experts have attributed the bullish trend at the PSX to an expected fall in interest rate and positive momentum in terms of Pakistan’s pursuit of another larger programme with the IMF.

During the previous week, PSX witnessed bullish trend due to fresh buying on expectations of more foreign inflows, and improving economic indicators.

The benchmark KSE-100 index surged by 1,183.41 points on week-on-week basis and closed at new highest-ever level of 73,085.50 points.

In a key development, Finance Minister Muhammad Aurangzeb said on Sunday that there were no “strategic state-owned enterprises” (SOEs) as he stressed the need for privatisation.

Aurangzeb made the remarks in Lahore during a panel discussion at the Pre-Budget Conference held in collaboration with Business Recorder and the Federation of Pakistan Chambers of Commerce & Industry in Lahore.

Aurangzeb declared “the concept of a strategic SOE does not exist.”

“There will be a public-private partnership and we will accelerate the privatization agenda,” he said.

Globally, Asian shares crept to 15-month highs on Monday in a week where inflation figures could make or break hopes for earlier U.S. rate cuts, while Chinese activity data will test optimism about a sustained recovery in the world’s No. 2 economy.

Beijing has already reported a welcome pickup in inflation to an annual 0.3% in April, helping to soothe worries about a slide into prolonged deflation. Forecasts favour further gains in April retail sales and industrial output due on Friday.

Chinese authorities are also set to sell 1 trillion yuan ($138.24 billion) in longer-dated bonds to help fund stimulus spending at home.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2%, after rallying for three weeks straight.

Meanwhile, the Pakistani rupee recorded a marginal decline against the US dollar, depreciating 0.03% in the inter-bank market on Monday. At close, the local unit settled at 278.20, a loss of Re0.08 against the greenback, as per the State Bank of Pakistan.

Volume on the all-share index decreased to 721.6 million from 741.2 million a session ago.

The value of shares increased to Rs25.65 billion from Rs25.27 billion in the previous session.

Cnergyico PK was the volume leader with 64.22 million shares, followed by WorldCall Telecom with 51.64 million shares, and Hum Network with 29.02 million shares.

Shares of 387 companies were traded on Monday, of which 241 registered an increase, 120 recorded a fall, while 26 remained unchanged.