Shares at PSX gain over 700 points ahead of MPC meeting
Shares at the Pakistan Stock Exchange (PSX) climbed more than 700 points in intraday trade on Monday as market participants await the State Bank of Pakistan’s (SBP) monetary policy decision today.
The benchmark KSE-100 index climbed 732.19 points, 0.94 per cent, to stand at 78,761.69 points at 10:46am from the previous close of 78,029.50.
Raza Jafri, chief executive of EFG Hermes Pakistan, said the index “is reacting positively to several factors such as the monetary policy later today”.
Jafri also said that the “news reports of a supportive stance by China, no further increase in political temperate over the weekend, and the onset of the result season” helped the upward trajectory.
Mohammed Sohail, chief executive of Topline Securities, said that the market was now focused on the monetary policy rate meeting and July inflation numbers, adding that the “majority of investors expect a rate cut today so they are gradually buying shares”.
Yousuf M. Farooq, director of research at Chase Securities, highlighted that the market rallied “on the end of a rollover week, expectations of a rate cut and relative calm on the political front.”
“The market is expecting a rate cut of 100-150bps with more rate cuts expected over the next year,” he added.
Awais Ashraf, director research at AKD Securities, echoed the same sentiments.
He said the index surged following reports of China’s commitment to support Pakistan in securing the International Monetary Fund (IMF) programme “and its willingness to consider converting IPPs to local coal, which will help save foreign exchange for the country”.
“Additionally, expectations of aggressive monetary easing by the SBP in the first half of FY [fiscal year] 2025, due to falling inflation reaching single digits, strengthen the case for investing in equities,” he highlighted.
More to follow