PSX crosses 54,000 mark as rupee falls

KARACHI:

The Pakistan Stock Exchange (PSX) hit a new all-time high and breached the psychological barrier of 54,000 in early morning trading on Tuesday amid the IMF’s continued “timely” review of the domestic economy under its loan program 3 billions of dollars.

However, later in the day, it retreated below the barrier in profit selling.

The domestic currency, however, fell to a five-week low of Rs 287 against the US dollar in the interbank market on rising demand for the foreign currency as Pakistan and the IMF discussed options to raise fresh foreign financing to bridge the deficit in current financial year 2023-24.

The benchmark PSX KSE-100 Index hit a record high of 54,313 points, up more than 450 points or nearly one percent. The index had closed at 53,860 points on Monday.

Intraday highs, however, eased to 133 points with the benchmark falling below 54,000 around 1:55 p.m. The correction was seen in intraday profit selling.

Before the intraday correction, former Treasury official Dr. Khaqan Haasan Najeeb said in a brief comment “IMF talks and early signs of growth in agriculture and large-scale manufacturing (LSM) helped maintain momentum in the PSX as the index took above 54,000 points.”

Topline Securities CEO Muhammad Sohail said that due to the IMF’s timely review, it is expected that the international organization will soon approve the release of the next loan tranche of $700 million.

The tranche will improve the country’s foreign exchange reserves and partly address rising demand for the dollar.

Sohail said the stock’s valuation remained attractive despite the index rocketing to a new high, as share prices are trading at a price-to-earnings (PE) ratio of four these days compared to the usual seven to eight multiples. Lucrative share prices encourage many investors to buy shares.

On the other hand, the rupee maintained its downward trend for the twelfth consecutive business day and touched a five-week low of Rs 287 against the dollar around mid-day on rising demand for the foreign currency.

The local currency fell sharply by Rs 1.71 in intraday trade to Rs 287 compared to Monday’s close of Rs 285.29/$