Little breathing space for PSX investors amid uncertainty
Business
KSE-100 index rose to 115,093.10 after gaining 990.87 points but closed in negative zone
KARACHI (Dunya News) – The Pakistan Stock Exchange (PSX) on Tuesday went off to an encouraging start on the heels of the latest policy rate cut by the State Bank of Pakistan (SBP).
The situation, however, reversed as selling spree resulted in trading in negative zone.
At one point in the morning, the KSE-100 index rose to 115,093.10 after gaining 990.87 points (0.87pc). Later, investors seemed jittery and day's trading closed at 113,568 after losing 533 points.
On Monday, the PSX started with bearish trend amid simmering geopolitical tensions between Pakistan and India following the Pahalgam attack.
The benchmark KSE-100 index was hovering at 113,223.46 after losing nearly 900 points during the opening hours of trading in the PSX. Later, things improved a bit and the index rose to 114,102 points.
The volatility is said to be linked with India’s possible plans of launching airstrikes after Indian Prime Minister Narendra Modi held a significant 40-minute meeting with Air Chief Marshal VR Chaudhari a day ago.
POLICY RATE CUT
The State Bank of Pakistan’s Monetary Policy Committee (MPC) on Monday cut the policy rate by 100 basis points (bps), bringing it down to 11 percent.
In a statement, the SBP announced that the Monetary Policy Committee (MPC) decided to reduce the interest rate, citing the lower-than-anticipated April inflation, which is largely the result of falling prices of perishable foods and energy.
April recorded a modest inflation rate of just 0.3pc, mainly due to the high comparison base from the previous year.
This decline was driven by reduced prices of essential food items like wheat, onions, potatoes, and some pulses, along with lower electricity and fuel costs.
The MPC, in its previous meeting on March 10, adopted a cautious approach and kept the policy rate unchanged at 12 percent, taking inflation expectations and the position of the external account into consideration.
