Market watch: Stocks rally over 1,000 points in intra-day trading

By Muhammad YaseenPublished On 06 Jan 2023

KARACHI: Stocks bounced back from the bearish trend of the past week on Monday as the KSE-100 index rallied over 1,000 points in intra-day trading.

Fuelled by a lower-than-expected inflation reading, coupled with a recovery in global stock markets the index powered past the 39,000-mark.

At 1:32 pm, the KSE-100 index was up 1,032.7 points or 2.56 percent to trade at 39,016.32 points.

According to data released by the Pakistan Bureau of Statistics on Monday, inflation slowed down to 12.4 percent in February owing to a reduction in prices of essential food items.

The development acted as a catalyst for investors who resumed buying at attractive share prices as they anticipated a cut in the benchmark interest rate, which is due to be announced later this month.

On the international front, Asian shares regained a measure of calm on Monday as markets bounced after a searing sell-off last week and investors pinned hopes on a likely coordinated global monetary response to help soften the economic blow of the coronavirus outbreak.

BMA Research Executive Director Saad Hashmi told The Express Tribune that the inflation reading falling below market expectation was the major reason behind the rise in the index.

“The inflation reading fell below the market consensus hence it provided investors with the much-needed relief,” he said. “It has also sparked speculations of a cut in the interest rate by the State Bank of Pakistan in the upcoming monetary policy.”

Echoing his views, MAFA Capital CEO Muzammil Aslam said lower inflation coupled with a recovery in the global stock markets helped lift up the index on Monday.