Stocks rebounded at the Pakistan Stock Exchange (PSX) in a significant turn of events following the State Bank of Pakistan’s (SBP) decision to maintain the interest rate, providing much-needed stability and clarity to the market. This decision and other factors led to the benchmark KSE-100 gaining nearly 1% during trading on Tuesday, a clear sign of market confidence.
The market was a beacon of sustained optimism throughout the day, with the volume and value of shares traded surpassing that of the previous session. This consistent positive sentiment in the market is a promising sign for investors and financial professionals.
At close, the benchmark index settled at 65,502.60, an increase of 612.09 points or 0.94%. It hit its intra-day high of 65,624.73 earlier in the session.
Investors demonstrated their confidence in the market as across-the-board buying was witnessed, particularly in index-heavy sectors, including autos, Oil and Gas Exploration Companies, and OMCs, all of which settled in the green. This widespread buying activity is a testament to the market’s breadth and depth, instilling confidence in the market’s performance.
Experts attributed the bullish trend to the expected decision by the central bank to maintain the status quo.
On Monday, the Monetary Policy Committee (MPC) of the SBP kept the key policy rate unchanged at 22%, its sixth successive decision to maintain the status quo.
“In approaching the decision, the MPC noted that inflation, in line with earlier expectations, has begun to decline noticeably from H2-FY24,” it said in a statement on Monday.
“It, however, observed that despite the sharp deceleration in February, the level of inflation remains high, and its outlook is susceptible to risks amidst elevated inflation expectations. This warrants a cautious approach and requires continuity of the current monetary stance to bring inflation down to the target range of 5–7% by September 2025.”