PSX dips then recovers, closing the week on a high note

Stock market

KARACHI: The outgoing week saw a slight erosion in Pakistan Stock Exchange (PSX), with an overall decline of 260 points.

After opening at 46,013 points, the benchmark KSE-100 index continued its decline for the first two days, closing at 45,865 points on Monday and further deepening to 45,508 points on Tuesday. However, it turned to recovery on Wednesday, closing at 45,590, followed by 45,650 points on Thursday and eventually shutting the trading week at 45,753 points on Friday.

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The biggest factor adding the bearish tone to the index remained the risk of higher policy rate by the State Bank of Pakistan (SBP), further dampened by the persistent inflationary pressures. After the SBP announced to keep the policy rate unchanged at 22 percent, the index sentiment followed.

However, the recovery was primarily fueled at the back of Pakistani Rupee’s recovery against the US Dollar. The expectations of investment inflow from the UAE under the Special Investment Facilitation Council (SIFC) initiatives, and the PSX MD’s statement of upcoming IPOs also lent strength to the investors’ sentiments.

The SBP announced that the policy rate is unchanged due to expectations of lower inflation in the coming weeks, which also acted as a positive factor for the PSX movement.

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