The stock market ended in the red on Tuesday despite a strong start to the session, as profit-taking erased early gains driven by the central bank’s unexpected rate cut.
The benchmark KSE-100 Index closed at 113,568.50, down 533.73 points, or 0.47%, from the previous close of 114,102.23.
During intraday trade, the index climbed to an intraday high of 115,093.10, an increase of 990.87 points, or 0.87%.
The session’s low was recorded at 113,418.52, reflecting a decline of 683.71 points, or 0.6%.
“The market was unable to capitalise on yesterday's surprise rate cut due to profit taking. The banks are impacted negatively due to the tightening spread, hence, profit taking was witnessed,” said Ahfaz Mustafa, CEO of Ismail Iqbal Securities.
“With the IMF board approval, budget and the pending border crisis in play, the market player will remain cautious,” he added. said Ahfaz Mustafa, CEO of Ismail Iqbal Securities.
The bourse had opened on a strong note, buoyed by the State Bank of Pakistan (SBP) delivering a larger-than-expected interest rate cut yesterday before the shift in momentum.
“The market is buoyed by the SBP's 100bps policy rate cut announced yesterday, signalling a resumption of monetary easing that only a minority anticipated,” said Amreen Soorani, Head of Research at Al Meezan Investment.
“Coupled with improving macroeconomic fundamentals and the SBP's cautious forward monetary policy guidance alongside expected strong forex inflows in the next two months, investor confidence appears to be recovering after a turbulent April.”
The SBP slashed the benchmark interest rate by 100 basis points to 11%, the sharpest cut since June 2024, as inflation pressures softened and risks from US tariffs and regional tensions loomed.
The move caught most analysts off guard, with many expecting either no change or a modest 50 bps reduction. The policy rate now stands at its lowest level in three years, bringing cumulative cuts over the past 11 months to 1,100 basis points.
Meanwhile, the PSX closed largely unchanged on Monday, with the KSE-100 index edging down by 11.7 points to settle at 114,102.23. The session had seen highs of 114,552.21 and a low of 113,077.67 as investors awaited clarity from the central bank’s policy decision.