PSX registers relief rally, benchmark gains 657 points as end to political crisis in sight
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Pakistan Stock Exchange's (PSX) benchmark KSE-100 index registered a relief rally on Friday, gaining more than 700 points in intraday trading as days-long political uncertainty began showing signs of abatement after a Supreme Court ruling led to the restoration of the National Assembly.
The market opened on a positive note, with the index rising to 44,2361.81, a rise of nearly 450 points, within the first thirty minutes of trading.
The day's high was seen at around 12:30pm, when the index was up 714 points to reach 44,501.55.
By close at 1:15pm, the index stood at 44,444.58 points, or 657.75 points (1.5 per cent) up.
According to broker Zafar Moti, investor sentiment is positive as they are expecting political stability following the apex court's ruling.
Yesterday, the Supreme Court set aside the deputy speaker's ruling to dismiss the no-trust resolution against Prime Minister Imran Khan and the subsequent dissolution of the NA by the president on the PM's advice, putting an end to five days of uncertainty on the status of the government.
"This is the reason why the market remained unaffected even after the sudden increase in interest rate by the State Bank of Pakistan (SBP)," Moti said.
In the biggest hike in years, the SBP had raised its policy rate by 250 basis points to 12.25 per cent in an emergency meeting on Thursday and said in a statement that more steps like an increase in export refinancing rates and cash margin on imports would be announced soon.
However, Moti added that he was optimistic that the bulls would remain in control and the index would rise further after the SC's ruling.
Raza Jaffrey, head of research at Intermarket Securities, also said the rally at the stock market would continue into the next week if the no-trust vote against PM Imran tomorrow would lead to political stability.
He added that if engagements were resumed with the International Monetary Funds over a loan facility — a programme that was stalled following the dissolution of the NA last week — it would lead to the rupee gaining ground against the dollar, which, in turn, would lead to further improvements in the equities market.
