PTBP Web Desk
The Pakistan Stock Exchange (PSX) continued its upward trajectory, building on the positive momentum seen in previous sessions. On Friday,
The market attracted significant buying interest, especially in banking, oil, and gas stocks, driving the benchmark KSE-100 index past the historic 83,000-point mark during intra-day trading. This surge reflects growing investor confidence, particularly in sectors with heavy index weights, as positive macroeconomic factors continue to influence market sentiment.
At midday, the KSE-100 index stood at an impressive 83,171.53 points, marking an increase of 449.77 points or 0.54%. This is the first time in the history of the Pakistan Stock Exchange that the index has crossed the 83,000-point threshold, signifying the strong performance of key sectors such as commercial banking, oil and gas exploration, chemicals, and property.
The driving force behind this record-breaking rise was the performance of index-heavy stocks, including notable names such as MCB Bank (MCB), Meezan Bank (MEBL), National Bank of Pakistan (NBP), Pakistan Petroleum Limited (PPL), Oil and Gas Development Company (OGDC), and Mari Petroleum (MARI). These companies traded in the green, contributing significantly to the overall increase in the index.
Among other positive contributors, Air Link Communications also saw increased interest after a report by Business Recorder revealed that the company had imported two units of an electric vehicle for testing purposes. This move was interpreted by the market as a signal of potential future growth in the emerging electric vehicle (EV) segment in Pakistan, further bolstering investor optimism.
The positive sentiment in the PSX is largely attributed to improving macroeconomic indicators, experts noted. A key factor boosting investor confidence is the strengthening of Pakistan’s foreign exchange reserves, which have crossed the $10 billion mark for the first time in over two and a half years. This significant milestone was achieved following the recent disbursement of a loan tranche from the International Monetary Fund (IMF).
The State Bank of Pakistan (SBP) announced that its foreign exchange reserves increased by $1.168 billion, rising from $9.533 billion to $10.702 billion. This influx of foreign capital has eased concerns regarding Pakistan’s balance of payments and foreign exchange stability, which had previously weighed on market sentiment.
The PSX’s bullish trend also gained support from local investors and institutions, who showed strong interest in various sectors. On Thursday, the KSE-100 Index posted its highest-ever closing level, surging by 754.76 points or 0.92%, and closing at 82,721.77 points. This marked a new milestone in Pakistan’s financial markets, with local participation being a significant driving force behind the surge.
While the PSX enjoyed its record-breaking performance, global markets faced a different scenario. On Friday, Asian stocks retreated as investors remained cautious amidst rising geopolitical tensions in the Middle East. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped by 0.32% and was on track to end the week with little overall change.
One of the key factors influencing global market dynamics was the sharp rise in oil prices, which headed for their most significant weekly gain in more than a year. The escalation of the Israel-Hamas conflict, along with rising tensions between the United States and Iran, have fueled uncertainty in the energy markets.
US President Joe Biden’s comments on Thursday that the United States was considering strikes on Iran’s oil facilities in retaliation for Tehran’s missile attacks on Israel added further volatility to the market. Additionally, Israel launched new airstrikes on Beirut in response to Hezbollah’s attacks, further heightening geopolitical risk in the region. These developments caused oil prices to spike, reflecting concerns over potential disruptions to supply from the oil-rich Middle East.
The surge in oil prices has had a ripple effect across global markets, particularly in energy-dependent sectors. For Pakistan, rising oil prices have mixed implications. While they have contributed to the strong performance of domestic oil and gas exploration companies like PPL, OGDC, and MARI, they also present challenges for the country’s import bill and inflationary pressures.
As the Pakistan Stock Exchange continues its record-breaking run, market experts remain cautiously optimistic about its future performance. The combination of improving macroeconomic conditions, increased foreign exchange reserves, and institutional support has positioned the PSX as an attractive destination for both local and foreign investors.
However, challenges remain, particularly with the global economic landscape remaining uncertain due to geopolitical risks and fluctuating oil prices. The PSX’s future trajectory will likely depend on a combination of domestic economic stability and the ability to navigate external shocks such as rising energy costs and geopolitical conflicts.
Investors are also closely watching developments in the country’s economic reforms, especially in areas such as tax policy and the regulatory environment, which could influence future market performance. Additionally, the role of the IMF and its loan program will be crucial in maintaining economic discipline and ensuring that Pakistan’s fiscal and monetary policies remain on track.
