Business

PSX witnesses bullish trend following interest rate cut, IMF meeting date

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Digital Desk

2 years ago

KARACHI: Pakistan Stock Exchange (PSX) witnessed a significant surge of 800 points on Friday a day after the State Bank of Pakistan (SBP) cut its key policy rate by 200 basis points.

The benchmark KSE-100 index climbed 868.08, or 1.1 percent, to stand at 79,857.77 points from the previous close of 79,017.61 points.

The Director of Research at AKD Securities, Awais Ashraf, said: “Investors are enthusiastic about meeting all IMF requirements necessary to unlock $7bn Extended Fund Facility and aggressive monetary easing by State Bank of Pakistan in yesterday’s meeting.”

Mohammed Sohail, chief executive of Topline Securities, confirmed that the IMF board meeting date and rate cut helped propel market sentiment. However, he cautioned that “some uncertainty on expected foreign selling due to FTSE rebalancing” was keeping the “share price in control”.

Pakistan’s central bank on Thursday announced to cut its key policy rate by 200 basis points (bps) to 17.5 percent amid slowing inflation and declining international oil prices.

SBP in a statement said, “The Monetary Policy Committee (MPC) decided to reduce the policy rate by 200 bps to 17.5 percent, effective from September 13, 2024,” adding that it took into account the core inflation which fell sharply over the past two months.

Furthermore, the International Monetary Fund (IMF) spokesperson Julie Kozack also announced that the global lender’s Executive Board will meet on September 25 to discuss the approval of the $7 billion Extended Fund Facility (EFF) to Pakistan.

Digital Desk