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KSE-100 index gains more than 1,100 points in intraday trading

KSE-100 index gains more than 1,100 points in intraday trading

Stocks witnessed a buying frenzy on Wednesday as the benchmark KSE-100 index soared by more than 1,100 points in intraday trading, with analysts saying the bourse gained confidence due to the increase in the interest rate a day earlier being in line with market expectations.

The index was at 44,401.45 points at 2:05pm — up by 2.67 per cent or 1154.74 points from the previous day’s close of 43,246.71 points.

Speaking to Dawn.com, Intermarket Securities’ head of equities Raza Jafri said the index rose by more than 2pc after the State Bank of Pakistan (SBP) announced its decision to lift the benchmark interest rate by 100 basis points on Tuesday.

He said the SBP’s forward guidance that the interest rates would remain “broadly unchanged” in the near term also played its part. “This has infused confidence back and the cyclical sectors such as cement, steel and autos, which had sharply fallen in the last two weeks, are now rebounding very strongly,” Jafri added.

Meanwhile, Alpha Beta Core CEO Khurram Schehzad said the rally was due to the interest rate not entering into double digits, adding that the effects were expected to remain for one to two days in the market.

“The State Bank governor has hinted that the rate will not increase further, because of which investors are taking new positions in the market,” he said.

Schehzad said the next auction of treasury bills was very important and would determine the market’s direction.

During Tuesday’s interest rate announcement, the SBP had signalled that it was done with hiking rates in the near term, having already lifted the policy rate by 150 basis points at its last meeting in November.

“Given rate increases since September and outlook, the Monetary Policy Committee felt that the end goal of mildly positive real interest rates on a forward-looking basis was now close to being achieved.

“Looking ahead, monetary policy settings are expected to remain broadly unchanged in the near-term,” the central bank had said in a statement.

Source: Dawn News

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