10,448 - Interest rate hiked by 100 bps
July 29, 2008
The Karachi Stock market dipped down to 10,255 and recovered to close down at 10,448. The monetary policy has been announced (see article below ) which removes any future uncertainty from the market. The market should go up once the interest rate hike has been absorbed, however a close below 10,400 will be negative for the market and it would head to 10k and lower.
News : The State Bank of Pakistan (SBP) on Tuesday announced an increase in its key discount rate to 13.0 percent from 12.0 percent, effective July 30th, reinforcing its fight against inflation and widening twin deficits.State Bank Governor Shamshad Akhtar announced an increase in a monetary policy statement that focused heavily on what she called a "totally unsustainable" level of government borrowing… "Hence considering the risk related to rising external current account and fiscal deficit and worsening inflation outlook, the State Bank has decided to raise the policy rate in line with the market expectation by 100 basis points to 13 percent," Akhtar said. The State Bank left the banks’ cash reserve ratio at 9.0 percent and statutory liquidity requirement at 19.0 percent, … Aaj News
Market Low : 10,255.12 High : 10,578.49
Market Close : 10,448.19 – 130.30 points down
