Stocks rise as SBP keeps rate on hold

Express Tribune

3 days ago

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The Pakistan Stock Exchange (PSX) witnessed a mixed session on Wednesday as investors remained cautious ahead of the State Bank of Pakistan's (SBP) policy rate announcement. However, late-session buying lifted the benchmark KSE-100 index by nearly 450 points.
The index fluctuated between intra-day high of 139,018.88 and low of 137,658.81. It closed with a gain of 447.43 points, or 0.32%, at 138,412.25.
Sentiment shifted in the latter half of the session after the SBP maintained its benchmark policy rate. The decision triggered a rally in the banking sector, with notable gains in major names such as United Bank, Habib Bank and MCB Bank.
"The market ended on a positive note as banks rallied following the SBP's announcement to keep policy rate unchanged, contrary to market expectations of a reduction of 50 basis points," AKD Securities Director Research Mohammed Awais Ashraf told The Express Tribune. Additionally, Systems Limited surged after acquiring British American Tobacco's SAA services to fuel its future growth.
He expected interest rates to drop to single digits, supported by easing inflation and stability in the foreign exchange market due to lower debt repayments in the current year.
KTrade Securities, in its market wrap, wrote that stocks saw a mixed session as investors awaited the central bank's policy rate decision. The KSE-100 index fluctuated between intra-day low of 137,659 and high of 139,019, eventually closing up by 447 points at 138,412.
Later, the SBP announced that it had kept interest rate unchanged, citing inflationary pressures and trade deficit concerns. Market players also remained focused on a potential Pakistan-US trade deal, which is likely to be finalised soon, it said.
Arif Habib Limited (AHL) observed that the KSE-100 rose from support zone to regain the 138k level. Some 41 shares rose while 59 fell with Systems Ltd (+6.9%), United Bank (+2.08%) and Habib Bank (+3.21%) contributing the most to index gains. On the contrary, Fauji Fertiliser (-0.7%), Lucky Cement (-1.51%) and Engro Holdings (-0.94%) were the biggest drags, it said. In corporate news, Engro Fertilisers announced 1HCY25 earnings per share (EPS) of Rs6.34 (+10% year-on-year) and dividend of Rs6.50 per share.
Also, Finance Minister Muhammad Aurangzeb was in the US to conclude trade talks with final discussions this week, while the SBP held its benchmark rate steady for the second meeting amid inflation and tariff uncertainty, despite expectations of a reduction.
JS Global analyst Muhammad Hasan Ather noted that the market experienced volatile trading. It initially rallied on optimism about a potential rate cut, but the SBP held the policy rate unchanged at 11%.
This triggered buying interest in bank stocks, however, overall sentiment remained neutral to negative. Ather said that corporate results, coupled with any positive economic developments on the external front, may provide support to the index in the days ahead.
Overall trading volumes decreased to 425.8 million shares compared with Tuesday's tally of 606.3 million. Traded value came in at Rs25 billion. Shares of 476 companies were traded. Of these, 152 stocks closed higher, 290 fell and 34 remained unchanged.
The Bank of Punjab led the volumes chart with trading in 24.8 million shares, rising Rs0.25 to close at Rs13.72. It was followed by Crescent Star Insurance with 21 million shares, gaining Rs0.82 to close at Rs4.34 and Maple Leaf Cement with 14.5 million shares, losing Rs2.13 to close at Rs79.62. Foreign investors bought shares worth Rs228 million, said NCCPL