KARACHI: Pakistani stocks ended higher on Monday, after the central bank cut key discount rate by 100 bps over the weekend, a larger-than-expected move aimed at spurring economic growth against a backdrop of slowing inflation.

The benchmark 100-share index of the Karachi Stock Exchange KSE closing 0.31 percent, or 101.60 points up at 32,707.22.

“An above-expectation cut of one percent in interest rate brought renewed interest across the board,” said delaer Samar Iqbal at Topline Securities, adding that the KSE-100 index closed marginally positive as index heavyweight banks declined sharply. “Most of the banking stocks closed at their 5 percent lower limit as Pakistan central bank reduced the policy rate by 100 bps to 7 percent and introduced a target rate of 6.5 percent, which is expected to squeeze margins of the banking sector,” Iqbal said.

Muslim Commerical Bank Ltd. down 5 percent to 254.35 rupees, while D.G. Khan Cement Co. Ltd. was up 3.03 percent at 127.32 rupees.

The rupee was steady at 101.90/101.97 against the dollar, compared with Friday’s close of 101.90/101.95. Overnight rates in the money market fall to 6.65 form Friday’s close of at 8.00 percent.