PSX crosses 56,000 points as rupee continues downward trend

Rupee cumulatively lost nearly 4% or Rs11 during the last 15 days

KARACHI:

The Pakistan Stock Exchange (PSX) surpassed another milestone of 56,000 points to reach a new all-time high, extending the record-making spree on Monday.

At the same time, the Pakistani rupee dropped to a six-week low of Rs288 against the US dollar in the inter-bank market due to an increase in demand for the greenback.

The PSX benchmark KSE-100 index hit a new historical high of 56,238 points in the early trading hours on Monday, up by 1.5% or around 850 points from Friday's close.

The stock market has added over 3,000 points in the past week to date in the wake of a smooth IMF review of the local economy under ongoing its $3 billion loan programme.

Investors cheer the expected IMF approval for the next tranche of $710 million as Islamabad has adhered to all of the fund's conditions for the review.

Besides, the market is expecting the central bank to cut its benchmark policy rate sooner than expected, potentially in December 2023, after the rate of return on the government debt securities dropped sharply by up to 180 basis points last week.

The policy rate cut would provide a breather to the struggling economy and bank financing at an interest rate to businesses which would enable them to initiate new investment projects.

This will happen at a time when the listed companies are already reporting record-high profits at PSX.

The market is also going up on expectations for renewed foreign buying in local stocks ahead MSCI's semi-annual review of global stocks on Tuesday.

PSX is likely to gain weight in the review among peer countries. The development would encourage foreign investors to take new possessions at PSX.

The local currency, however, lost another Rs0.77 to a six-week low of Rs287.80 against the greenback, as it maintained a downward trend on the fifteenth consecutive working day on Monday.

The currency has cumulatively lost nearly 4% or Rs11 in the 15 days.