Shares at the Pakistan Stock Exchange (PSX) gained more than 180 points in intraday trade on Thursday.
The KSE-100 index stood at 75,021.59, gaining 185.29, or 0.25 per cent, at 11:34am from the previous close of 74,836.30.
However, at around 10:30am, the PSX stood at 75,300.03, having gained 463.73 from the previous close.
Awais Ashraf, director of research at Akseer Research, said, “The drop in cutoff yields of treasury bills in yesterday’s auction, amid lower expected inflation readings for May, enhances optimism for a rate cut in the upcoming monetary policy. Subsequently, investors remain bullish on cyclical sectors.”
“However, this enthusiasm seems to be short-lived given concerns over fiscal tightening and the new IMF programme,” he cautioned.
Yousuf M. Farooq, director of research at Chase Securities, attributed the upward trajectory to the decline in the three-month treasury bills by 60 basis points yesterday.
He also noted that there were 30bps declines in six-month and 12-month papers. “This decline in rates has fueled expectations of a rate cut going forward. Interest rates act like gravity for stock prices, as interest rates go down, stock prices go up.”
“The market could remain jittery till the budget as investors seek clarity on new taxes and the IMF programme. Monetary and fiscal policy are both expected to remain tight going forward,” he added.
More to follow
