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Tuesday May 21, 2024

PSX fails to sustain above 75,000 points as profit-selling weighs

Optimism around IMF talks, expectations of rate cut reason behind rally, says analyst

By Web Desk
May 15, 2024
A trader can be seen at the Pakistan Stock Exchange (PSX) building in Karachi. — PPI/Files
A trader can be seen at the Pakistan Stock Exchange (PSX) building in Karachi. — PPI/Files

KARACHI: Stocks on Wednesday ended flat owing to late profit selling after crossing 75,000 points for the first time in an early-session rally that was mainly triggered by an MSCI upgrade, traders said.

The benchmark KSE-100 index gained 132 points or 0.18% to close at 74,663.98 after shooting up to 75,115.32 during the intraday trading at 10:11am. A day earlier the KSE-100 Index had closed at 74,531.19 points.

The CEO of Topline Securities, Muhammad Sohail, in a note, said that the market reached a record high of 75,000 points as a result of increased foreign fund investments.

Additionally, MSCI has added the National Bank of Pakistan (NBP) to its Frontier Market Index during its semi-annual review.

This decision is expected to raise Pakistan's weight in the index and attract more passive foreign investment at PSX.

Foreign investors are showing more interest and confidence as Pakistan approaches the International Monetary Fund (IMF) for a new loan programme to ensure the continuation of repaying maturing foreign debt and to create financial space to support the growth of the economy.

Samiullah Tariq, the head of research at Pak-Kuwait Investment Company, told Geo.tv that the market reacted positively due to the optimism regarding the new IMF programme.

Tariq added that the expectations of an interest rate cut in the next monetary policy due to declining inflation is also pushing the market.

A day earlier, stocks soared to a fresh all-time high as investors bet on a successful outcome from talks with the IMF on a new loan programme and hopes of Saudi investment.