PTBP Web Desk
The Pakistan Stock Exchange (PSX) continued to shatter records, pushing past the 84,000 mark for the first time during intra-day trading.
As of 1:30 pm, the benchmark KSE-100 index stood impressively at 84,505.46, marking an increase of 973.51 points, or 1.17%. This surge is underpinned by a combination of positive economic indicators and robust performance in the oil & gas sector, signaling a bullish momentum that could influence future market directions.
The ascendancy of the PSX is notable in several key sectors that are considered heavyweights in the index, including automobile assemblers, cement, commercial banks, fertilizer, and oil and gas exploration companies, alongside Oil Marketing Companies (OMCs). Notably, stocks such as NBP, MEBL, FFBL, PPL, OGDC, SNGP, and PSO saw significant gains, painting the market in a shade of optimistic green.
Market experts, including Sana Tawfik, Head of Research at Arif Habib Limited (AHL), attribute this rally to improved macroeconomic indicators and the anticipation of a further policy rate hike in the near future. “Amid a decline in the inflation rate and money market yields, the market is anticipating a significant policy rate decline of between 150-200 basis points,” explained Tawfik. She maintains that there is ample room for this reduction, which could further stimulate the market.
In addition to these economic factors, the corporate earnings season, set to commence next week, is expected to inject further vigor into the market’s dynamics. This anticipation builds on the already bullish trends observed over the previous week, where the PSX hit its highest-ever levels, spurred by strong local investor interest and substantial institutional support.
Despite these positive trends, the PSX’s rally comes amidst a backdrop of increasing security concerns, highlighted by a recent attack near Karachi’s Jinnah International Airport. This incident targeted a convoy carrying Chinese staff of the Port Qasim Electric Power Company (Private) Limited, resulting in the tragic loss of two Chinese nationals and injuries to another. “There is a lack of clarity among market participants regarding last night’s incident,” Tawfik noted, indicating potential volatility due to geopolitical uncertainties.
The historical performance last week saw the KSE-100 index surge by 2,239.83 points on a week-on-week basis, breaking past the 83,000 psychological barrier to close at an all-time high of 83,531.96 points. This momentum is not isolated to Pakistan but resonates across global markets.
On the international front, Asian stocks have rallied, and the US dollar reached a seven-week peak against the yen following exceptionally positive US labor data that dispelled recession fears and altered expectations regarding future rate cuts. Japan’s Nikkei led these gains with a 2% rally, bolstered by a depreciating yen, while MSCI’s broadest index of Asia-Pacific shares climbed 0.4%.
In the United States, expectations for a super-sized 50-basis-point rate cut by the Federal Reserve have been dialed back significantly. Instead, traders are now betting on a more modest quarter-point cut, with a slight possibility that rates may remain unchanged. This shift was prompted by the recent payrolls report, as analyzed by CME Group’s FedWatch Tool, illustrating a dynamic interplay between labor market strength and monetary policy expectations.
As we navigate through these tumultuous but promising times, the PSX’s performance stands as a beacon of potential economic resilience and growth. Investors and market watchers alike will be keenly observing how these various factors—ranging from corporate earnings reports to geopolitical tensions—will shape market trajectories in the weeks to come.
