PSX Witnesses Rise As KSE-100 Benchmark Surges By 0.9 Per Cent
The surge follows Saudi Crown Prince Mohammed bin Salman’s hosting of Prime Minister Shehbaz Sharif for an iftar dinner in Makkah, amid speculations that Riyadh may soon announce an investment of approximately $1 billion in Reko Diq, home to one of the world’s largest copper and gold reserves.
The Pakistan Stock Exchange experienced further gains as the benchmark KSE-100 Index surged by 0.90 percent in early trading hours on Monday.
At the time of reporting, 10:54 PST or 05:54 GMT, the KSE-100 Index had breached the historic 69,000 mark for the first time, reaching 69,029.19, reflecting a gain of 612.41 points.
This increase was attributed to investor optimism fueled by expectations of potential interest rate cuts by the central bank.
The upsurge coincided with Saudi Crown Prince Mohammed bin Salman hosting Prime Minister Shehbaz Sharif for an iftar dinner in Makkah. Speculations emerged that Riyadh might soon announce an investment of approximately $1 billion in Reko Diq, which is known for hosting one of the world’s largest copper and gold reserves.
The meeting between Saudi Crown Prince Mohammed bin Salman, often referred to as MBS, and Shehbaz Sharif has the potential to open doors for investments across multiple sectors, such as mining, energy, and agriculture.
Investors are eagerly awaiting foreign investments to invigorate the economy, which has been significantly affected by skyrocketing energy prices and interest rates, resulting in unsustainable business expenses. Progress in attracting foreign investments is expected to strengthen the worth of undervalued stocks, spurring increased buying activity.
Nevertheless, there are reservations regarding the probability of rate cuts by the State Bank of Pakistan, despite a consistent decrease in inflation as measured by the consumer price index (CPI) over the past three months, notably a substantial decline in March. This skepticism emerges from the imminent increase in fuel prices and utility tariffs, expected to maintain inflationary pressures, propelled by IMF conditions as Islamabad pursues another funding package from the lender.
Additionally, recent US data has dampened expectations of potential rate cuts by the Federal Reserve, leading to a surge in gold prices driven by speculative purchases.
