Stocks soar on interest rate cut expectations

Aggressive value-hunting amid expectations of a reduction in the SBP policy rate next month, pushed the benchmark KSE index again above 75,000 on Thursday. Ahsan Mehanti of Arif Habib Corporation said a slight cut in yields by up to 5bps on different tenors of Pakistan Investment Bonds in the last auction strengthened market hopes for a decrease in the key interest rate as inflation is expected to decelerate to 13-15pc in May. He said speculations in the pre-budget session ahead of the government’s prior actions on energy, tax, and trade tariffs for reaching a Staff-Level Agreement for a new IMF bailout and deliberation on privatisation of state-owned enterprises also contributed to the bullish close. Topline Securities Ltd said the fertiliser, power, and E&P sectors contributed positively to the index, with OGDCL, K-Electric, Fauji Fertiliser, and Hub Power adding 175 points. Conversely, Engro Corporation, MCB Bank, and United Bank Ltd came under selling pressure and lost 110 points.