Bullish momentum persists at the Pakistan Stock Exchange (PSX) as the benchmark KSE-100 crosses the historic 69,000 level for the first time during Monday’s trading session. By 12:10pm, the benchmark index hovers at 69,329.65, marking an increase of 912.87 points or 1.33%.
The surge in buying activity is primarily driven by the energy sector, with prominent companies like OGDC, PPL, PSO, SSGC, and SNGPL trading in the green.
Market experts attribute this rally to the decline in inflation rates, which stood at 20.68% YoY for March 2024, resulting in positive real interest rates for the first time in 38 months. This development raises expectations for a potential policy rate cut by the central bank.
Furthermore, additional liquidity flows into the market as foreign investors and institutions increase their buying activities, further supporting the market’s upward momentum.
Tahir Abbas, Head of Research at Arif Habib Limited (AHL), explains, “The market also remains bullish as PM Shehbaz Sharif’s visit to Saudi Arabia raises hopes for potential bilateral agreements.”
He adds, “Additionally, the market is optimistic as the Finance Minister prepares to attend the IMF/WB spring meeting in Washington, where negotiations for a new program crucial for Pakistan’s long-term sustainability are anticipated.”
Last week witnessed a bullish trend at the bourse, driven by robust buying from both local and foreign investors, complemented by institutional support. The benchmark KSE-100 index surged by 1,274.66 points on a week-on-week basis, closing at 68,416.78 points.
Globally, Asian markets experienced fluctuations on Monday as traders evaluated the likelihood of the Federal Reserve cutting interest rates this year. A better-than-expected US jobs report boosted Wall Street’s three main indexes on Friday, with investors focusing on economic positives rather than monetary policy implications.
However, observers caution that the strong jobs report, which also indicates falling unemployment and robust wage growth, may deter the Fed from implementing the three rate cuts in 2024 it previously signaled.
Traders now await the release of minutes from the central bank’s recent meeting, along with the latest consumer price index reading, scheduled for later this week.
