Buying momentum was seen at the Pakistan Stock Exchange (PSX) on Tuesday as the benchmark KSE-100 Index closed the session higher by 690 points amid expectations of a further cut in the policy rate.
The KSE-100 started the session with a buying spree that largely continued throughout the session.
At close, the benchmark index settled at 81,804.59, up by 690.39 points or 0.85%.
Key drivers of the market rally included heavyweights such as HUBC, MARI, OGDC, BAHL, and PPL, collectively contributing 533 points to the index. Conversely, BAFL, HBL, POL, UBL, and MEBL pulled the index down by a combined 170 points, brokerage house Topline Securities said.
“The State Bank of Pakistan’s (SBP) buyback of T-Bills was a positive sign for the equity market,” Saad Hanif, an 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 was expecting a further decline in the policy rate in the coming months. The next Monetary Policy Committee (MPC) meeting is due on November 4, 2024.
Later, data showed that Pakistan’s headline inflation clocked in at 6.9% on a year-on-year basis in September 2024, lower than market expectations.
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 Rs1,800 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.
Volume on the all-share index increased to 359.08 million from 297.99 million on Monday.
The value of shares jumped to Rs17.16 billion from Rs14.10 billion in the previous session.
Fauji Cement was the volume leader with 29.12 million shares, followed by Hub Power Co.XD with 19.62 million shares, and WorldCall Telecom with 19.05 million shares.
Shares of 436 companies were traded on Tuesday, of which 243 registered an increase, 139 recorded a fall, while 54 remained unchanged.