PSX climbs over 2,700 points amid positive geopolitical developments

KARACHI – Pakistan Stock Exchange (PSX) on Tuesday maintained the bullish trend as positive geopolitical developments and unchanged interest rate have boosted investor confidence. The KSE-100 index gained2,736.01 points to climb to 179,775.83 points, reflecting a positive change of 1.55 percent compared to previous close of 177,039.82 points. Experts attributed the ongoing buying rally in stock market to easing situation in the Middle East following a peace agreement between the US and Iran. They highlighted that the decision of the State Bank of Pakistan (SBP) to keep the policy rate unchanged has lifted the investor confidence. A day earlier, Monetary Policy Committee (MPC) decided to keep the policy rate unchanged at 11.5 percent. The Committee noted that global oil prices have eased following the recent positive geopolitical developments, yet they remain elevated as compared to pre-conflict levels. Nonetheless, as anticipated in the last MPC meeting, the impact of the conflict is now reflecting in recent economic indicators. Headline inflation rose to double digits in April and May, while core inflation also edged up. Moreover, economic activity is showing some signs of moderation, reflecting the impact of elevated prices, austerity measures and prevalent economic uncertainty. Meanwhile, the external account pressures remain moderate. While evaluating the impact of these unfolding developments and risks, the MPC observed that the macroeconomic outlook is broadly unchanged from its previous meeting. In this context, the MPC assessed that the current monetary policy stance remains appropriate to guide inflation towards the target range of 5 – 7 percent over the medium term.