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Stocks rally at PSX after SC order drives ‘positive sentiments

KSE-100 trade at 44,217.77 registering an increase of 430.94 points
Published 08 Apr, 2022 11:45am
Meanwhile, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) in its emergency meeting on Thursday, decided to increase the key policy rate by 250 basis points (bps) to 12.25% to address the risks to inflation and external stability. AFP/File
Meanwhile, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) in its emergency meeting on Thursday, decided to increase the key policy rate by 250 basis points (bps) to 12.25% to address the risks to inflation and external stability. AFP/File

Stocks staged a rally at the Pakistan Stock Exchange (PSX) as clarity on the political front alongside monetary action from the central bank reversed investor sentiments, driving the benchmark KSE-100 Index above 400 points in the opening hour of the trading session on Friday.

At the time of filing this report, the index was being traded at 44,217.77 registering an increase of 430.94 points or 0.98%.

“The market is reacting positively to clarity on the political front,” Sana Tawfik, vice-president research and a senior analyst at Arif Habib Limited told Business Recorder.

In two major developments on Thursday, the Supreme Court set aside the ruling of the National Assembly Deputy Speaker, Qasim Suri, restored the National Assembly to its position of 3rd April, and held Prime Minister Imran Khan’s advice to the president to dissolve the Assembly, contrary to the Constitution and of no legal effect.

The speaker was asked to summon and hold a sitting of the Assembly in the present session, and shall do so immediately and in any case not later than 10:30am on Saturday, April 9, 2022, to conduct the business of the House as per the Orders of the Day that had been issued for 03 April 2022.

Tawfik said that the rupee, which was on a record depreciation spree dropping to a low of over 188 against the US dollar, has also recovered amid positive developments. “There is an overall positive sentiment in all markets,” she said.

Meanwhile, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) in its emergency meeting on Thursday, decided to increase the key policy rate by 250 basis points (bps) to 12.25% to address the risks to inflation and external stability.

The committee believed that this strong and proactive policy response was necessitated due to deterioration in outlook for inflation and increase in risk to external stability since the last meeting.

The meeting of the MPC was scheduled for April 19, 2022; however, sensing the situation of the economy, the committee decided to meet before the schedule to take a decision on the policy rate. The committee meeting was chaired by Governor SBP Dr Reza Baqir.

“Apart from policy rate hike, SBP’s import curtailment measures were also done in the right time,” said Tawfik.

The SBP on Thursday announced a 100% cash margin on the import of 177 items with immediate effect to reduce the pressure on the exchange rate.

The story was originally published in Business Recorder on April 08, 2022.

imran khan

National Assembly

pakistan stock exchange

no confidence motion

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