The benchmark KSE-100 Index increased 1.76 percent on Monday, passing beyond the 69,000 barrier for the first time in its history. This maintained Pakistani stock market’s record-breaking run, as investors remained upbeat about potential rate cuts by the central bank.
The most recent advances also follow Prime Minister Shehbaz Sharif’s iftar dinner given by Saudi Crown Prince Mohammed bin Salman in Makkah, at a time when Riyadh is anticipated to announce an approximately $1 billion investment in Reko Diq, one of the world’s greatest reserves of copper and gold.
After reaching a high of 69,720.03, the KSE-100 Index concluded at 69,619.98 with a net gain of 1,203.20 points by the time trading was closed for the day. This was due to international investors, both individual and institutional, making purchases.
The meeting between Shehbaz and the Saudi crown prince, also referred to as MBS, may open doors for investment in a variety of industries, including mining, energy, and agriculture.
With record-high energy and interest rates driving up the cost of conducting business to an unaffordable level, investors are clamoring for foreign investment to prop up the economy.
Any improvement in this area would not only contribute to the rupee’s appreciation but also increase the value of cheap equities due to the anticipated purchasing frenzy, as buyers will not pass up the chance to purchase at the reduced prices.
However, there is a big question mark over the heightened expectations that the State Bank of Pakistan will begin reducing interest rates following the consumer price index (CPI) showing a steady fall in inflation over the past three months, particularly the greater than anticipated decline in March.
The reason is that, given Islamabad’s desperation to secure another package from the Washington-based lender, there is an impending hike in gasoline costs in addition to power and gas charges. This move will further sustain the inflationary pressure under the IMF criteria.
Meanwhile, the most recent US data has reduced expectations for potential rate reduction by the Federal Reserve, which is driving up the price of gold as speculative purchasing occurs.
