The Pakistan Stock Exchange (PSX) hit a new all-time high and crossed the 55,000-point barrier for the first time in history, while the local currency fell to a five-week low of Rs 287.5 against the US dollar in the interbank market on morning trading hours on Friday.
The benchmark KSE-100 index PSX hit 55,268 points, up 1.85% or more than 1,000 points in intraday trade from Wednesday’s close of 54,261.42.
This is the third straight business day that the market has soared to a new high in intraday trading.
Pak-Kuwait Investment Company Head of Research Samiullah Tariq said that “the market maintained its winning spree in the wake of sharp fall in the yield cut (rate of return) of 3-year and 5-year government bonds, namely Pakistan Investment Bonds (PIBs), giving hope that the central bank may cut its key interest rate earlier than previously expected.”
A fall in the policy rate would reduce the cost of bank finance to industries and businesses and allow them to invest more and earn more. This will directly support the economic development of the country.
In addition, the PSX is also expected to attract foreign investment in the near future ahead of Morgan Stanley Capital International’s (MSCI) semi-annual rating on Tuesday (Nov 14).
Topline Securities has predicted that the revision will lead to an increase in PSX’s weighting among its peers in the MSCI Frontier Market Index and will give reasons for foreign investors to invest more capital in Pakistani listed companies.
The Pakistani rupee, however, depreciated by Rs 0.60 to settle at Rs 287.50 against the dollar as it maintained a bearish trend for the fourteenth consecutive business day on Friday.
The rupee has been losing ground on limited demand for foreign currency in the domestic economy as traders refrained from buying the currency earlier on the expectation that the rupee-dollar rate could depreciate in the near term.
The coin has fallen cumulatively by 3.85% or Rs 10.67 in the last 14 days to date.
Earlier, it gained 11% or over Rs 30 in the previous six weeks to a three-month high of Rs 276.83/$ by mid-October 2023.
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