The Pakistan Stock Exchange (PSX) crossed another milestone of 56,000 points to set a new all-time high on Monday, extending its record-breaking streak.
At the same time, the Pakistani rupee fell to a six-week low of Rs. 288 against the US dollar in the interbank market as demand for the greenback increased.
PSX Benchmark KSE-100 Index Crossed 56,000 points Historic Mark
In early trading hours on Monday, the PSX benchmark KSE-100 index reached a new historical high of 56,238 points, up 1.5% or about 850 points from Friday’s close.
The stock market has gained nearly 3,000 points in the past week as a result of a smooth IMF examination of the local economy as part of its ongoing $3 billion loan program.
Investors are cheering the likely IMF clearance for the next tranche of $710 million, as Islamabad has met all of the fund’s assessment conditions.
SBP Policy Rate Impact
Furthermore, the market expects the central bank to lower its benchmark policy rate sooner than expected, maybe in December 2023, after the yield on government debt instruments fell substantially by much to 180 basis points last week.
The policy rate drop would provide a break to the suffering economy as well as bank financing at a low interest rate to enterprises, allowing them to launch new investment projects.
This will occur at a time when the listed corporations are already posting record earnings on the PSX.
Foreign Investments Likely To Increase
The market is also rising on anticipation of fresh foreign buying in local companies ahead of MSCI’s semi-annual global stock index review on Tuesday.
PSX is anticipated to acquire weight in the peer country review. This development would encourage international investors to purchase fresh PSX stock.
The rupee, on the other hand, fell further Rs. 0.77 to a six-week low of Rs. 287.80 versus the US dollar on Monday, continuing its negative trend for the fifteenth straight working day.
In the last 15 days, the rupee has lost approximately 4%, or Rs. 11.
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