KSE-100 sees buying momentum over expectations of key policy rate cut

Some buying momentum was seen at the Pakistan Stock Exchange (PSX) during intra-trading on Tuesday.

At 1:30pm, the benchmark KSE-100 Index was hovering at 81,715.24 level, an increase of 601.04 points or 0.74%.

Buying was witnessed in key sectors including automobile, commercial banks, oil and gas exploration companies and OMCs. Index-heavy stocks including PSO, PPL, OGDC, HCAR and INDU traded in green.

“The State Bank’s (SBP) buyback of T-Bills was a positive sign for the equity market,” Saad Hanif, analyst at Ismail Iqbal Securities, told Business Recorder.

The analyst said with the inflation rate expected to clock in at 7-7.5%, the market is expecting a further decline in the policy rate in the coming months.

In a historic move, the government on Monday initiated a T-Bill buyback program, repurchasing Rs351 billion worth of T-bills against a target of Rs500 billion.

“This bold move is expected to strategically reprofile the government’s debt, transitioning towards longer maturities while lowering the burden of debt servicing costs,” said Arif Habib Limited in a note.

In another key development, the Federal Board of Revenue (FBR) suffered a massive shortfall of over and above Rs87 billion during the first quarter (July-September) 2024-25.

Despite taxation measures of Rs 1,800 billion in the budget (2024-25), the FBR only managed to collect Rs2,452 billion against the assigned target of Rs2,539 billion set for the first quarter of current fiscal year.

On Monday, the KSE-100 Index settled at 81,114.20, down by 177.93 points or 0.22%.

Globally, Asian stocks eased near two-and-half-year highs on Tuesday and the US dollar firmed following hawkish comments from Federal Reserve Chair Jerome Powell that scuppered bets of big interest rate cuts, while Mid-East tension kept risk sentiment in check.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.13% lower at 620.05 on Tuesday, just below the two-and-a-half-year high of 627.66 touched on Monday.

The index is up 17% so far in the year.

Japan’s Nikkei rose 1.5% in early trading after shedding 4.8% on Monday as investors contended with perceived monetary policy hawk Shigeru Ishiba winning a contest to become the country’s prime minister.