The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index closed 139 points higher on Friday as late-session profit-taking trimmed intra-day gains.
The KSE-100 started the session with a strong buying spree, hitting an intra-high of 78,914.28.
However, profit-taking in the final hours provided the bears some relief.
At close, the benchmark index settled at 78,488.22, up by 138.55 points or 0.18%.
“The equity market closed positively today, driven by projections that the inflation rate will move towards single digit level, increasing expectations for a lower policy rate in the future,” brokerage house Ismail Iqbal Securities said in its post-market report.
Sectors that contributed positively included fertiliser, auto, chemical, E&P, and textile.
On Thursday, the benchmark KSE-100 Index closed higher by 357 points to settle at 78,349.66.
Pakistan’s headline inflation is projected to decline and hover around 9.5-10.5% in August 2024, easing further in the coming months, the Finance Division said on Friday.
“On the account of stability in economic indicators, inflation is expected to remain within the range of 9.5-10.5% in August and further decline to 9-10% in September 2024,” the Ministry of Finance said in its ‘Monthly Economic Update and Outlook’.
Moody’s Ratings (Moody’s) upgraded the government of Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa2 from Caa3, and changed the outlook to positive from stable.
The global credit rating agency said that “there is now greater certainty on Pakistan’s sources of external financing, following the sovereign’s staff-level agreement with the International Monetary Fund (IMF) on 12 July 2024 for a 37-month Extended Fund Facility (EFF) of $7 billion”.
“We expect the IMF Board to approve the EFF in the next few weeks,” it said.
The KSE-100 Index witnessed an increase of 601 points/+0.8% month-on-month during August 2024, according to a report of Arif Habib Limited.
Globally, Asian stocks rose on Friday and were poised for a solid end to August, while the dollar was staring at its worst monthly performance in nine months on the view that the Federal Reserve is all but certain to cut interest rates next month.
The release of the US core personal consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation, as well as a reading on euro zone inflation take centre stage later on Friday and are likely to offer further clues on the rate outlook across major economies.
MSCI’s broadest index of Asia-Pacific shares outside Japan was last up 0.77%, and was set for a gain of 2.3% for the month.
The main focus for investors remains on the pace and scale of Fed rate cuts this year, with those bets further cemented after a chorus of Fed speakers signalled their intention to do so as early as next month.
Markets have priced in about 100 basis points (bps) worth of easing by the end of the year, with about a 32.5% chance of an outsized 50 bps cut in September.
The Pakistani rupee registered marginal improvement against the US dollar, appreciating 0.04% in the inter-bank market on Friday. At close, the currency settled at 278.54, a gain of Re0.10 against the US dollar.
Volume on the all-share index increased to 680.81 million from 599.80 million on Thursday.
The value of shares rose to Rs21.19 billion from Rs20.41 billion in the previous session.
Hascol Petrol was the volume leader with 63.11 million shares, followed by Kohinoor Spinning with 44.64 million shares, and Symmetry Group Ltd with 38.69 million shares.
Shares of 454 companies were traded on Friday, of which 214 registered an increase, 180 recorded a fall, while 60 remained unchanged.