Stocks rebound on rate cut speculation

Ending its downward trend, the Pakistan Stock Exchange (PSX) rebounded significantly on Tuesday, driven by speculation about a potential rate cut by the State Bank of Pakistan (SBP) in its monetary policy announcement on July 29. In the morning, trading began on a positive note, with the KSE-100 index reaching its intra-day high of 79,585.34 points. Approval of new privatisation laws by the National Assembly standing committee to avoid further delay along with postponement of a cabinet meeting for slapping ban on the opposition contributed to bullish sentiment at the bourse. Additionally, the appreciation of Pakistan’s fiscal measures by Fitch Ratings and improving economic indicators also provided vital support to the market’s positive performance. Although the index fell to the intra-day low of 78,634.15 points in the afternoon, it ended the day with modest gains. Major contributors to the market’s gains were exploration and production (E&P), banking and automotive sectors.