The KSE-100 Index concluded at 163,038.5 points following the State Bank of Pakistan’s decision to increase interest rates by 50 basis points.
KARACHI:
Bullish momentum returned to the Pakistan Stock Exchange (PSX) on Monday, as robust buying in key sectors during the latter part of the trading session offset initial losses. This recovery occurred despite lingering investor uncertainty surrounding the State Bank of Pakistan’s (SBP) monetary policy announcement.
The benchmark KSE-100 Index experienced an early decline, dropping to 162,347.31 points—a decrease of 27.56 points or 0.02%—shortly after the market opened. Sentiment was initially muted due to a lack of positive catalysts and apprehension about the Monetary Policy Committee’s (MPC) interest rate verdict.
However, the index subsequently rebounded, climbing 663.59 points or 0.41% to close at 163,038.47. It had previously touched an intraday low of 161,250.07 before a surge in buying activity propelled it to a high of 163,477.09.
The turnaround coincided with the SBP raising its policy rate by 50 basis points to 12%, a move anticipated to elevate borrowing costs for enterprises and potentially dampen investment and economic growth.
According to KASB KTrade equity trader Ahmed Sheraz, the KSE-100 finished at 163,083 points, up 663 points or 0.41% daily, recovering from its intraday trough of 161,250 to a peak of 163,477.
Trading was volatile amid earlier fears of a possible 100-basis-point rate hike. Buying interest then emerged, especially in the cement sector, aiding the benchmark’s recovery and securing a positive close, Sheraz noted.
Sector performance was mixed, with cement, investment banking, and oil and gas stocks making positive contributions. United Bank Limited (UBL), Engro Holdings, and Lucky Cement were key supporters of the rebound, whereas Meezan Bank closed lower.
Meanwhile, Brent crude oil remained near $115 per barrel, exacerbating inflationary concerns. Pakistan, along with Saudi Arabia and Türkiye, is engaged in mediation efforts with Iran, with a delegation visiting Tehran on Monday.
Despite the positive close, investor sentiment is expected to stay cautious due to elevated oil prices, the outcome of regional mediation, Israeli elections on Tuesday, and the upcoming US midterm elections on November 3.
Sheraz indicated that the market is likely to remain volatile and headline-driven following the 50-basis-point rate increase, with near-term direction hinging on geopolitical developments and shifting macroeconomic forecasts.
Overall, trading volume decreased to 376 million shares from 398.9 million on Friday, with the total value of traded shares amounting to Rs16.1 billion.
In the ready market, shares of 495 companies were traded. Of these, 196 stocks closed higher, 251 declined, and 48 remained unchanged. LSE Financial (R) led trading volumes, with 25.5 million shares exchanged. Its share price fell by Rs0.01 to close at Rs0.78.