Shares at PSX rally after rate cut, IMF meeting date

Published
0
Bullish momentum witnessed at the Pakistan Stock Exchange— PSX data portal
Bullish momentum witnessed at the Pakistan Stock Exchange— PSX data portal

Shares at the Pakistan Stock Exchange (PSX) rallied on Friday, a day after the State Bank of Pakistan (SBP) cut its key policy rate by 200 basis points.

The benchmark KSE-100 index climbed 868.08, or 1.1 per cent, to stand at 79,857.77 points from the previous close of 79,017.61 points at 11am. The index closed at 79,333.05, up by 315.44 points or 0.4pc, from the previous close.

Mohammed Sohail, chief executive of Topline Securities, confirmed that the IMF board meeting date and rate cut helped propel market sentiment.

However, he cautioned that “some uncertainty on expected foreign selling due to FTSE rebalancing” was keeping the “share price in control”.

On Thursday, the International Monetary Fund (IMF) confirmed that the Fund’s board will meet on September 25 to discuss the new EFF.

Additionally, the central bank also announced reducing its key policy rate by 200 basis points (bps) to 17.5 per cent from 19.5pc amid demands for a major rate cut.

Yousuf M Farooq, director research at Chase Securities, attributed the rally “on news of the IMF board meeting on the 25th.

“A rate cut of 200bps was higher than market expectations and the market is expecting another rate cut in the next MPS,” Farooq said, however adding that the “FTSE rebalancing and the expectation of foreign selling has kept the rally in check”.

“But — with the expectation of a stabilising economy on the back of a new IMF programme — a broad based upward rerating can be expected in the market over the next year,” he said.

Awais Ashraf, director research at AKD Securities, said: “Investors are enthusiastic on meeting all IMF requirements necessary to unlock $7bn Extended Fund Facility and aggressive monetary easing by State Bank of Pakistan in yesterday’s meeting.”

Shahab Farooq, director of research at Next Capital Limited, echoed the same sentiments, attributing the upward momentum to higher than expected cut in policy rate and announcement of date of review by the IMF’s executive board, whose delay had fuelled “concerns and uncertainties”.

“Further positive statements by finance minister and governor state bank confirming a stable external account and downtrend in inflation is likely to improve investor confidence going forward,” he said.

However, he cautioned that the fiscal side remained a concern “with higher chances of a mini budget despite staggering profits of the SBP”.

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Kashmir unresolved
Updated 30 Sep, 2026

Kashmir unresolved

The just solution lies in India addressing the issue through a trilateral dialogue involving the legitimate representatives of the Kashmiri people and Pakistan.
Water shortage
30 Sep, 2026

Water shortage

THAT the country is entering the Rabi season with an anticipated water shortage of nearly 25pc, the lowest carryover...
Young hearts
30 Sep, 2026

Young hearts

THE observance may have passed, but the message of World Heart Day should not fade with it. The occasion is a useful...
Terror and politics
Updated 29 Sep, 2026

Terror and politics

There is an urgent need to tone down the rhetoric and tackle terrorism as a collective challenge for both the affected provinces and the federation.
Watching the glaciers
29 Sep, 2026

Watching the glaciers

THE latest signs from Pakistan’s mountains are worrying. Suparco says the number of unfrozen glacial lakes it...
Dangerous agenda
29 Sep, 2026

Dangerous agenda

AS the world remains fixated on the US-Iran conflict, elsewhere in the Middle East, Israel is consolidating its grip...