PSX crosses 56,000 as rupee continues downtrend

KARACHI:

The Pakistan Stock Exchange (PSX) breached another 56,000-point mark to hit a new all-time high, extending Monday’s record spree.

At the same time, the Pakistan rupee fell to a six-week low of Rs 288 against the US dollar in the interbank market on rising demand for the greenback.

The benchmark PSX KSE-100 hit a new all-time high of 56,238 in early morning trading on Monday, up 1.5% or about 850 points from Friday’s close.

The stock market has added more than 3,000 points in the past week to date in the wake of a smooth overhaul of the local economy by the IMF under its current $3 billion loan program.

Investors are cheering the IMF’s expected approval of the next $710 million tranche as Islamabad has met all the fund’s conditions for the review.

In addition, the market expects the central bank to cut its key interest rate earlier than expected, possibly in December 2023, after the government bond yield fell sharply by as much as 180 basis points last week.

The cut in interest rates would provide a breather to the troubled economy and interest-bearing bank financing to businesses that would allow them to start new investment projects.

This will come at a time when listed companies are already reporting record profits on the PSX.

The market is also rising on expectations of renewed foreign buying in local stocks ahead of MSCI’s half-yearly review of global stocks on Tuesday.

PSX is likely to gain weight in the peer review. The development would encourage foreign investors to acquire new holdings in the PSX.

The local currency, however, lost another Rs 0.77 to a six-week low of Rs 287.80 against the dollar as it maintained a bearish trend for the fifteenth consecutive business day on Monday.

The coin has cumulatively lost nearly 4% or Rs 11 in 15 days.