The Pakistan Stock Exchange (PSX) grapples with a downturn of 2,124 points across five trading sessions in the past week. Analysts attribute market jitters to budget delays, yet optimism surrounds expectations of a marginal decrease in the central bank’s policy rate, providing some stability to the market.
The impending announcement of the federal budget FY2024-25 looms over the market sentiment, as investors brace for potential impacts. The delay in budget unveiling contributes to market volatility, heightening uncertainty among stakeholders.
The National Economic Council (NEC) and the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) are set to convene, with significant economic decisions on the agenda. The NEC, comprising 13 members, aims for a 3.6% economic growth target for the upcoming fiscal year. Additionally, the committee plans to unveil the next five-year plan, following a thorough review of current economic indicators.
Amidst these deliberations, expectations are rife regarding a 100 basis points (bps) reduction in the interest rates by the MPC. The previous MPC meeting, held on April 29, maintained the interest rate at a historic high of 22%, marking the seventh consecutive meeting without alteration.
As the week commences, the benchmark KSE-100 index opens at 73,754.01 points, reflecting the prevailing market sentiment. Investors anticipate a cautious trend in market movement throughout the day, navigating uncertainties surrounding budget announcements and monetary policy decisions.
