The Pakistan Stock Exchange (PSX) hit a new all-time high and crossed the 55,000 points barrier for the first time in history while the local currency slumped to a five-week low of Rs287.5 against the US dollar in the inter-bank market during morning trading hours on Friday.
PSX benchmark KSE-100 Index touched 55,268 points, soaring by 1.85% or over 1,000 points in intra-day trade from Wednesday’s close at 54,261.42 points.
This is the third consecutive working day the market has soared to a new high in intra-day trading.
Pak-Kuwait Investment Company, Head of Research, Samiullah Tariq said the “market has maintained the winning spree in the wake of sharp drop in cut-off yield (rate of return) on 3-year and 5-year government debt securities namely Pakistan Investment Bonds (PIBs), giving hope the central bank may cut its key policy rate sooner than expected earlier”.
The drop in the policy rate would reduce the cost of bank financing to industries and businesses and enable them to invest more and earn more. This would directly support economic growth in the country.
Besides, PSX is also expected to attract foreign investment in the near future ahead of the Morgan Stanley Capital International (MSCI) semi-annual review on Tuesday (November 14).
Topline Securities has projected the review would result in increasing PSX weightage among peer stock markets in MSCI Frontier Market Index and give reasons to foreign investors to pour in more capital into Pakistani listed companies.
The Pakistani rupee, however, depreciated by a fresh Rs0.60 to Rs287.50 against the greenback, as it maintained a downward trend on the fourteenth consecutive working day on Friday.
The rupee is losing on pent-up demand for foreign currency in the domestic economy, as traders avoided buying the currency earlier on expectation the rupee-dollar parity could depreciate in the near past.
The currency has cumulatively dropped 3.85% or Rs10.67 in the past 14 days to date.
Earlier, it gained 11% or over Rs30 in the prior six weeks to then three-month high of Rs276.83/$ in mid of October 2023.