PSX recovers from policy rate-driven sell-off

The KSE-100 ended Monday higher, adding 663.59 points, or 0.41%, to 163,038.47 after a volatile session. It had fallen as low as 161,250.07 before late buying in heavyweight shares lifted the benchmark to an intraday peak of 163,477.09, The Express Tribune reported. Cement, investment banking and oil and gas shares helped the recovery, although several bank and fertilizer stocks weighed on the index.

The State Bank raised its policy rate by 50 basis points to 12% later in the day, matching expectations described by market participants. The decision was linked in the report to geopolitical risks and higher oil and commodity prices, which have added to domestic inflation concerns. Brent crude was near $115 a barrel, while UBL, Lucky Cement and OGDC were among the positive contributors; Meezan Bank, Engro Fertilisers and HBL detracted from the index. The market close therefore combined a rebound in equities with tighter borrowing conditions for businesses.