Rupee slide boosts stock market, PSX crosses 45000 points level
Banks turned out to be top performers with contribution of 814 points to the index.
KARACHI (Dunya News) - Bullish trend persisted, as euphoria from the previous week continued which helped the index to remain green.
The KSE-100 managed to breach benchmark of 45,000 levels to close at 45,030 points, up by 1,667 points or 3.84 percent - pertinently, this is the second highest weekly return in 2018.
Amongst sectors, banks turned out to be top performers with contribution of 814 points to the index as market expects 25-50bps increase in policy rate in upcoming monetary policy which is likely to be scheduled next week. Similarly, E&Ps remained in limelight throughout the week, adding 248 points to the index gain as international crude oil prices increased by six percent during the week.
The gains were consolidated and got support from the currency market where domestic rupiya parity against greenback widened sharply. Local currency depreciated by more than 4 percent against the USD on Tuesday which changed the market momentum with investors speculating an uptick in policy rate by 25-50bps in the upcoming monetary policy.
Sectors that will potentially benefit from depreciation include Banks, E&Ps, Power, Technology and Textile which managed to push the benchmark index by +770pts on Tuesday.
Later during the week, rumors regarding domestic cement manufacturers increasing prices of cement by PKR 10/bag in North region drove the equity bourse.
According to an analyst the coming week could potentially be guided by inflows from foreign investors. As the gap between Pakistan’s nominal exchange rate and real effective exchange rate narrows down after two episodes of currency depreciation since December 2017, foreign investors might begin to take a second look at the attractive valuations on offer at the KSE100 index.
Next week will also see the start of future roll-over week which may result in drop in volumes particularly in small-cap names.
(Details by Haris Zamir)
