Pakistan Stock Exchange Soars Past 107,000 Mark Amid Positive Economic Indicators
Market analysts are closely monitoring the developments surrounding monetary policy adjustments and their potential impact on investor behavior.
The Pakistan Stock Exchange (PSX) experienced a significant surge on Thursday, surpassing the 107,000 mark for the first time in history.
The benchmark KSE-100 index rose by 2,577.71 points, or 2.45%, reaching 107,682.04 points, up from the previous close of 105,448.05 points at around 2:50 PM local time.
This rally is attributed to several positive macroeconomic indicators, including a notable drop in Pakistan’s annual inflation rate to 4.9% in November, marking its lowest level since 2017.
Additionally, the country’s trade deficit narrowed by 19% year-over-year to $1.59 billion, contributing to heightened expectations of a robust current account surplus and boosting market confidence.
The recent upward trend follows the PSX’s historic crossing of the 100,000-point milestone just a week prior, reflecting sustained investor optimism amid improving economic conditions and easing political tensions in the country.
Analysts have noted that these developments have fostered a bullish sentiment among investors, leading to increased trading activity across various sectors of the market
Key Highlights
- Historic Surge: The KSE-100 Index’s rise to over 108,000 points follows a period of substantial growth, having crossed the 100,000-point mark just days earlier on November 29, 2024. This rapid ascent underscores a remarkable recovery and resilience in the market after previous turbulence
- Investor Sentiment: Analysts attribute this bullish trend to expectations of a major interest rate cut by the State Bank of Pakistan (SBP). Recent declines in government T-bill yields have fueled speculation that the SBP may reduce its policy rate significantly, potentially by up to 200 basis points. Ahsan Mehanti from Arif Habib Corp noted that this speculation has driven increased buying activity among investors.
- Sector Performance: Leading contributors to the index’s rise included major companies such as Pakistan Petroleum Limited, Habib Bank, and Oil and Gas Development Company Limited, which saw substantial gains. Conversely, some banking stocks faced downward pressure, impacting overall performance.
- Market Dynamics: The trading volume surged to approximately 1.165 billion shares, indicating robust market activity. The PSX has seen a remarkable return of 142% over the past 17 months, reflecting improved fiscal policies and economic conditions in Pakistan.
