Stock market weekly round-up

KARACHI: Pakistan’s Stock Exchange (PSX) witnessed a turbulent week following its soaring to record heights, as investors engaged in profit-taking amidst the State Bank of Pakistan’s (SBP) decision to maintain its policy rate for the next six weeks.

The SBP’s choice to hold interest rates at 22 per cent introduced downward pressures, disappointing expectations for a rate cut that would stimulate economic activity. However, experts are also of the view that the current interest rate has proven useful to control hyperinflation, which makes this decision by the central bank to be economically prudent.

Saudi trade delegation arrives tomorrow

Despite this setback, positive influences on the PSX included a slowdown in Consumer Price Index (CPI)-based inflation to a near two-year low of 17.3 per cent and stable foreign currency reserves at $8 billion. Additionally, the release of the final tranche of $1.1 billion by the International Monetary Fund (IMF) under a $3 billion standby arrangement helped to improve the market sentiment.

News of potential substantial Saudi investment in Pakistan further bolstered market confidence towards the week’s end.

Monday saw intense selling pressure with the KSE-100 index plummeting by around 1,050 points amid uncertainty over the SBP’s policy rate announcement ahead of new loan discussions with the IMF. The following day, the market continued to suffer losses as the SBP maintained a stringent monetary policy amidst concerns over inflation, geopolitical risks, and pending fiscal measures.

Thursday’s session, following Wednesday’s holiday, proved volatile, marked by institutional profit-taking, a decline in global crude prices, and reduced exports from Pakistan, driving the KSE-100 below the 71,000-point threshold, at 71,902.09 points to be exact.

Stock market opens on a cautious approach after three consecutive losses

However, Friday witnessed a dramatic turnaround as bullish momentum surged through the PSX, propelling the KSE-100 index by over 1,200 points and nearing the 72,000 mark.

Despite the week’s fluctuations, the benchmark KSE-100 index closed at 71,902.09 points, marking a 1.16 per cent decline week-on-week (WoW), reflecting the market’s resilience amidst evolving economic dynamics.