KARACHI: The Pakistan Stock Exchange (PSX) on Friday recorded modest recovery amid hopes for cut in interest rate and improving global credit rating.
The KSE-100 index standing at 139,198.42 points, showing a modest gain of 505.76 points, or 0.36 percent, compared to the previous close. The trading has been suspended due to Friday prayer break.
The rebound comes after a bearish session on Thursday, when the benchmark index lost 561.69 points, marking a 0.40% decline. The index had closed at 138,692.67 points the previous day, down from 139,254.36 points in the prior session.
Experts said investors are closely monitoring macroeconomic developments and policy signals as uncertainty continues to weigh on sentiment.
Ratings agency S&P Global raised Pakistan’s sovereign credit rating to ‘B-’ from ‘CCC+’ and placed it on a ‘stable’ outlook on Thursday, saying the country’s finances and reserves had been stabilised by International Monetary Fund (IMF) support.
“The stable outlook reflects our expectations that continued economic recovery and government efforts to enhance revenue will stabilise fiscal and debt metrics,” S&P said in a statement on the move.
“We also expect that sustained official financing will support Pakistan in meeting its external obligations, and that the country will continue to roll over its commercial credit lines over the next 12 months.”
Pakistan’s longer-dated international bonds rallied after the upgrade, with the 2051 maturity gaining 1.6 cents to be bid at 84.85 cents on the dollar, according to Tradeweb data.
The 2031 and 2036 maturities also gained around 1 cent, while shorter-dated maturities posted smaller gains.
A majority of financial market participants expect Pakistan’s central bank to cut its key interest rate by 50 to 100 basis points at its upcoming Monetary Policy Committee (MPC) meeting on July 30, according to a new poll by Topline Securities published this week.
The findings reflect growing market confidence that declining inflation and easing global oil prices have created space for monetary easing.
In its last meeting, the State Bank of Pakistan (SBP) kept the policy rate unchanged at 11 percent, citing uncertainty over the federal budget and regional tensions in the Middle East. This time, a stronger consensus appears to be building toward a rate cut.
