PSX swings on monetary policy speculation
At 2:45pm, the benchmark KSE-100 Index was hovering at 137,833.93 level, a decrease of 130.88 points or 0.09%.
The MPC of the State Bank of Pakistan (SBP) will meet today (Wednesday) for deliberation on the key economic issues to decide on the Monetary Policy.
In the previous meeting held on June 16, 2025, the Committee kept the policy rate unchanged at 11%, as inflation was expected to trend up in the coming months.
Most market analysts anticipate a rate cut of 50 to 100 basis points, citing a current account surplus and a rise in foreign exchange reserves.
On Tuesday, the PSX experienced a volatile session, as early bullish momentum gave way to heavy selling pressure, pulling key indices deep into negative territory by the close. The benchmark KSE-100 Index closed at 137,964.82 points, marking a sharp decline of 1,415.24 points or 1.02%.
Globally, Asian stocks rose modestly on Wednesday, with investors cautious after trade talks between the US and China ended without any substantive agreement and ahead of the Federal Reserve's policy announcement.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3%, led by gains for Taiwanese stocks, after US stocks ended the previous session with mild losses as traders braced for a slew of corporate earnings.
Australian shares were up 0.7%, while Japan's Nikkei stock index slid 0.03%, and Hong Kong's Hang Seng Index skidded 0.4%. The euro edged up from a one-month low, rising 0.2% to $1.1564, as markets weighed the EU's trade deal with the Trump administration.
Traders are preparing for several central bank decisions, key economic reports and corporate earnings during the next few days, culminating in US President Donald Trump's August 1 tariff deadline.
The Federal Reserve is expected to leave interest rates unchanged at its policy meeting later on Wednesday, though it could see a rare dissent by some central bank officials in favour of lower borrowing costs.
This is an intraday update
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
an hour ago
- Express Tribune
Unchanged interest rate
Listen to article The SBP's decision to maintain its benchmark policy rate at 11% defied widespread market expectations of a cut, but also underscores a necessary, if unpopular, commitment to macroeconomic stability. While inflation plummeted to a nine-year low of 4.49% in FY25 — a dramatic drop from 23.4% the previous year — the central bank made its decision while looking forward, not backward. Recent upward adjustments in energy prices, particularly gas tariffs, threaten to reverse gains in price stability. The SBP projects inflation could breach its five to seven per cent target range in the coming months, necessitating preemptive intervention. While critics, especially industry groups, have derided the decision, noting the low monthly inflation rate of just 3.2%, the SBP also cited several other uncertainties, including a spike in imports that is also driving up the trade deficit, and volatility in international oil markets. In light of these very real threats to the health of the broader economy, industry groups' demand for lower rates does seem myopic. Cutting interest rates at this stage would also amount to throwing out all of the stabilisation successes of the past few years, including bolstering foreign exchange reserves, moving the current account into a surplus position, and earning sovereign credit rating upgrades. Monetary policy cannot operate in isolation. Fiscal slippages, such as the Rs200 billion shortfall in tax revenue, undermine stability and limit the SBP's flexibility. Given the number of Pakistanis who are in poverty or teetering on the edge of poverty, it is also prudent for the SBP to do whatever it can to protect citizens from price shocks. As we saw in the recent sugar fiasco, businesses' decision-making prioritises their own growth and profitability, usually without any concern for their impact on the economy or consumers. The SBP's job is not just to create a business-friendly environment, but to balance the needs of the business with the needs of citizens.
Business Recorder
3 hours ago
- Business Recorder
US sanctions force vessels with Russian oil to divert from India, sources say
NEW DELHI: At least two vessels loaded with Russian oil bound for refiners in India have diverted to other destinations following new U.S. sanctions, trade sources said, and LSEG trade flows showed. The U.S. Treasury Department this week imposed sanctions on more than 115 Iran-linked individuals, entities, and ships, some of which are involved in transporting Russian oil. U.S. President Donald Trump has urged countries to halt purchases of oil from Moscow, threatening 100% tariffs unless Russia agrees to a significant peace deal with Ukraine. Three ships - the Aframaxes Tagor and Guanyin and the Suezmax Tassos - were scheduled to deliver Russian oil to Indian ports this month, trade sources said. All three vessels are under U.S. sanctions. Tagor was bound for Chennai on India's east coast, while Guanyin and Tassos were headed to ports in western India, according to trade sources and Russian ports data. US sanctions strand Iran, Russia oil on tankers, driving up crude costs Tighter Western sanctions aimed at cutting Russia's oil revenue, seen as funding its war against Ukraine, have been increasingly hitting Russian oil supplies for India, which buys more than a third of its oil needs from Russia. Tagor is now heading to Dalian in China, while Tassos is diverting to Port Said in Egypt, the data shows. Guanyin remains on course to Sikka, a port used by Reliance Industries and Bharat Petroleum Corp Ltd.. Indian Oil Corp, which was to receive the Tagor shipment, and BPCL did not respond to Reuters' emailed requests for comment. Zulu Shipping, linked to Panama-flagged Tassos and Tagor, and Guanyin-owner Silver Tetra Marine could not be reached for comments. Both companies are under U.S. sanctions. A Reliance spokesperson said that 'neither of these two vessels, Guanyin and Tassos, is coming to us'. Reliance has previously purchased oil in Guanyin. Separately, two other vessels, Achilles and Elyte, loaded with Russian oil, are preparing to discharge Russian Urals for Reliance, according to LSEG data. Both these vessels are sanctioned by Britain and the European Union. India has condemned the EU sanctions.
Business Recorder
5 hours ago
- Business Recorder
Oil falls more than $2 a barrel on worries about OPEC+ supply, US jobs data
HOUSTON: Oil prices fell more than $2 a barrel on Friday morning on jitters about a possible increase in production by OPEC and its allies, while weaker-than-expected U.S. jobs report fed worries about demand. Brent crude futures were down $2.04, or 2.85%, at $69.66 a barrel by 9:52 a.m. CDT (1452 GMT). U.S. West Texas Intermediate crude was down $1.95, or 2.82%, at $67.31. Both benchmarks remained on track for weekly gains. Three people familiar with discussions among OPEC members and allied producers said the group may reach an agreement as early as Sunday to boost production by 548,000 barrels per day in September. A fourth source familiar with OPEC+ talks said discussions on volume were ongoing and the hike could be smaller. The U.S. Labor Department said the country added 73,000 jobs in July, lower than economists had forecast, raising the national unemployment rate to 4.2% from 4.1%. 'We can blame U.S. President Donald Trump with the tariffs or we can blame the Federal Reserve for not raising interest rates,' said Phil Flynn, senior analyst with Price Futures Group. 'It looks like the Fed misjudged their decision on Wednesday.' On Wednesday, the Fed voted to keep interest rates unchanged, drawing criticism from Trump and a chorus of Republican legislators. Oil lost more than 1% in the previous session, though Brent remained on course for a weekly gain of 4.6%, with WTI headed for a weekly gain of 6.5%. Oil traders have focused on the potential impact of U.S. tariffs, with tariff rates on U.S. trading partners largely set to take effect from next Friday. Trump signed an executive order on Thursday imposing tariffs ranging from 10% to 41% on U.S. imports from dozens of countries and foreign territories that failed to reach trade deals by his August 1 deadline, including Canada, India and Taiwan. Partners that managed to secure trade deals include the European Union, South Korea, Japan and Great Britain. 'We think the resolution of trade deals to the satisfaction of the market – more or less, barring a few exceptions – has been the key driver for oil price bullishness in recent days, and further progress on trade talks with China in future could be a further confidence booster for the oil market,' said Suvro Sarkar at DBS Bank. Prices were also supported this week by Trump's threats to impose 100% secondary tariffs on Russian crude buyers as he seeks to pressure Russia into halting its war in Ukraine. Thishas stoked concern over potential disruption to oil trade flows and the removal of some oil from the market. JP Morgan analysts said on Thursday that Trump's threatened penalties on China and India over their purchases of Russian oil potentially put 2.75 million barrels per day (bpd) of Russian seaborne oil exports at risk. China and India are the world's second and third-largest crude consumers respectively.
