KSE-100 retreats marginally as investors ‘unimpressed’ with 100bps cut in key policy rate

The Pakistan Stock Exchange (PSX) saw a lacklustre session on Tuesday and the KSE-100 Index fell 0.25% as investors awaited positive developments to assume fresh positions after the monetary policy announcement was largely seen as a neutral for the capital market.

During the trading session, the index fluctuated within a narrow range for the most part of the day after investors saw the reduction of 100 basis points in the key policy rate as an expected event.

At close, the KSE-100 Index settled at 78,628.81, a decrease of 198.94 points or 0.25%.

Analysts said “investors were unimpressed by the 100 basis pts policy rate cut, having anticipated a more significant reduction,” said Capital Stake in its report.

Meanwhile, Pakistan’s finance ministry, in its monthly economic outlook released on Tuesday, projected inflation in July to range between 12% and 13%, easing further in August to stand between 11.0% and 12.0%, it said.

The lower inflation is likely to keep the monetary easing momentum ongoing.

KSE-100 gains nearly 800 points ahead of monetary policy announcement

Globally, Asian markets edged down Tuesday as investors jockey ahead of a slew of central bank decisions, key economic data and earnings from tech titans this week.

While last week’s US inflation report further stoked optimism that the Federal Reserve will cut interest rates at least once this year, traders became more cautious after Monday’s rally.

The US central bank is expected to stay put on monetary policy Wednesday, but its post-meeting statement will be pored over in hopes of confirmation it will lower borrowing costs in September.

Meanwhile, the Pakistani rupee registered a marginal decline, depreciating 0.06% against the US dollar in the inter-bank market on Tuesday. At close, the currency settled at 278.66, a loss of Re0.16, against the greenback.

Volume on the all-share index decreased to 313.08 million from 371.09 million a session ago.

The value of shares declined to Rs17.61 billion from Rs19.15 billion in the previous session.

The Organic Meat was the volume leader with 24.83 million shares, followed by The Searle Company with 24.06 million shares, and Fauji Cement with 15.82 million shares.

Shares of 447 companies were traded on Tuesday, of which 152 registered an increase, 239 recorded a fall, while 56 remained unchanged.