KSE 100 index gains 1313 points over easing inflation

KARACHI: After a dismal week that saw the stock market stumble over coronavirus fears, the Pakistan Stock Exchange (PSX) bounced back on Monday after an easing in inflation for the month of February.

The benchmark KSE 100 index gained 1312.68 points, showing a health increase of 3.34 percent, and closed at 39,296.30 points. The total volume of shares reached 157.899 million valued at Rs7.968 billion. The lower bench KSE 30 index increased by 627.44 points (3.59 percent) and closed at 18,105.04 points. The top active stock remained MLCF (6.97%), Hascol (2.92%), Unity (5.78%), WTL (3.16%), FFL (8.33%), followed by TRG (6.53%), DGKC (6.99%), OGDC (5.84%) and FCCL (6.94%).

The Pakistan Statistics Bureau released a statement that consumer price inflation has slowed to 12.4 percent for the month of February. The bureau had recorded the highest CPI inflation in January at 14.56 percent, the highest in a decade. This forced the State Bank of Pakistan to maintain the policy rate at 13.25 percent over strong inflation.

The stock opened on subdued mood and dropped below the 38,000 level reaching 37,983.62 points but bulls slowly took charge and controlled the downward trajectory.  The market reacted positively to the news over easing in inflation and a recovery in global stock markets.

Investors are optimistic that declining inflation will lead to an easing of the monetary policy. The inflation reading at 12.4 percent was below the expected 13.3 percent. The IMF is also expected to release the third tranche of the bailout package which will set the course for the macro policy framework.