The Pakistan Stock Exchange (PSX) rebounded at the close of business on Monday and the benchmark KSE-100 index rose 663.59 points to close at 163,038.47 points. Thus, breaking the bearish streak that has been going on for the last three trading sessions.
The market witnessed significant volatility during the trading session. The index fell to 161,250.06 points at one point under selling pressure, but later recovered most of its losses with increased buying.
The index had hit its highest level during the day at 163,477.09 points. At the end of trading, the index closed 0.41 percent higher than the previous session.
The recovery in the market came at a time when investors were assessing the impact of the State Bank of Pakistan’s monetary policy decision and a possible hike in interest rates. The State Bank on Monday raised the policy rate by 0.50 percentage points to 12 percent.
The increase in interest rates could raise concerns that the cost of borrowing for businesses will increase and investment will be affected. On the other hand, a return to buying during the volatile share prices helped pull the market out of negative territory.
According to business activity data, about 37.60 crore shares were traded in the ready market, worth a total of Rs 16.19 billion. In the previous session, about 39.89 crore shares were traded for Rs 18.20 billion, indicating a decline in trading volume and value.
The total market value also increased to about Rs 18,061 billion, from about Rs 18,014 billion in the previous session. Thus, the market value recorded an increase of about Rs 47 billion during one trading session.
However, not all shares saw an equal increase. Shares of 495 companies were traded in the ready market, of which 196 increased in price, 251 decreased in price, while the share prices of 48 companies remained unchanged.
The future direction of the market will depend on key economic factors including interest rate decisions, inflation prospects, energy prices and regional geopolitical situation. Despite the one-day rally, it will be important for investors to assess the market trend in the coming sessions.
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