ISLAMABAD: The Pakistan Stock Exchange (PSX) surged by over 1,400 points on Thursday as bulls dominated the trading session, with analysts attributing the rise to a drop in oil prices at the international market and investors’ hopes of a further cut in the policy rate by the central bank.
The benchmark KSE-100 index rose by 1,459.41 points or 1.3 percent to close at 113,713.17 points on Thursday, up from the previous close of 112,253.76.
The development takes place as the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) is set to review the interest rate on Mar. 10, with many expecting the bank to slash the interest rate further.
“Stocks closed bullish led by scrips across the board amid speculations ahead of SBP policy announcement on March 10,” Ahsan Mehanti, managing director and CEO of Arif Habib Commodities, told Arab News.
It said investors’ expectations for further ease in the central bank’s policy after treasury bill auction yields remained flat, following a decade-low consumer price index inflation which was recorded at 1.5 percent year-on-year in February.
Prominent Pakistani brokerage house Topline Securities attributed the surge in stocks to a sharp decline in global oil prices.
“This rally was primarily driven by a sharp decline in international oil prices, which plunged to multi-year lows, uplifting investor sentiment,” Topline Securities said in its daily market review.
“Moreover, speculation surrounding high-level meeting on the clearance of the longstanding circular debt further fueled optimism across the board.”
The report highlighted how the benchmark index surged to an intraday high of 1,617 points causing the equity market to witness a robust rebound in today’s session.
It added that a total of 372 million shares changed hands which generated a turnover of Rs26.2 billion with PIBTL dominating the volume charts.
The development takes place as an International Monetary Fund (IMF) team is in the country for the first review of the $7 billion loan program that Islamabad secured last September.
A nine-member mission, led by IMF Mission Chief in Pakistan Nathan Porter, is in the country to assess Pakistan’s economic performance and determine the release of a $1.1 billion tranche from the $7 billion Extended Fund Facility (EFF) over the next three weeks, secured as part of Islamabad’s economic recovery plan.
