The Pakistan Stock Exchange staged a rally on Wednesday and the KSE-100 index soared over 1,100 points in intra-day trading, driven by clarity on interest rate coupled with upbeat near-term outlook issued by the State Bank of Pakistan.

In addition to increasing the interest rate by 100 basis points to 9.75 percent, the Monetary Policy Committee of the State Bank of Pakistan expected monetary settings of the country to remain broadly unchanged which revived investor sentiments.

According to the monetary policy statement, the end goal of mildly positive real interest rates on a forward-looking basis was now close to being achieved.

On the other hand, market participants who had held their purchasing decisions in wait for clarity on the interest rate, made fresh investments during the session.

At 2:02 PM, the KSE-100 index was trading at 44,362.33 points following a gain of 1,115.62 points or 2.58 percent.

Speaking to The Express Tribune Alpha Beta Core CEO Khurram Schehzad said that optimistic outlook of the economy, issued by the State Bank of Pakistan, fuelled bullish trading.

“Real interest rate is approaching zero and this, in particular, strengthened the market spirits,” he said. “The surge is the initial response to the upbeat projections issued by SBP.”

Moreover, the KSE-100 had been trading under capacity for the past few sessions and now it was recovering to its true potential, he said.

Arif Habib Limited Head of Research Tahir Abbas pointed out that although the central bank hiked the interest rate on Tuesday, it also projected status quo in monetary settings over the next few months which triggered a buying.

“The objectives of SBP have been broadly achieved and the near term outlook remains unchanged,” he said. “In addition, the much-needed clarity on interest rate is also aiding the uptrend.”

The story was filed by the News Desk.
The Desk can be reached at info@thecorrespondent.com.pk.

LEAVE A REPLY

Please enter your comment!
Please enter your name here