Cut in interest rate bodes well for KSE as index rises 134 points

Positive sentiments prevailed in the Karachi stock market during the outgoing week after State Bank of Pakistan slashed the policy rate by 150 basis points to 12 percent propelling investors to take positions in scrips across-the-board.

The Karachi Stock Exchange (KSE) 100-share index during the outgoing week gained 134 points or 1.1 percent to close at 11,988.09 points as compared to 11,853.84 points of the previous week.

“The week began on a bullish note for the KSE on the back of SBP’s decision to cut the discount rate by 150bps against market’s expectation of a 50-100bps rate cut,” said JS Sec analyst Furqan Ayub. “However, realisation of heightened macroeconomic risks tamed the excitement of investors as the 100-share index gained only 134 points.” Release of disappointing macroeconomic indicators kept investors cautious as foreigners remained net sellers of $2.8 million.
Macro indicators showed a worsening trend as trade deficit widened by 28.78 percent on yearly basis to $5.1 billion during first quarter of 2012.

From: Dailytimes