KARACHI: “The PSX enjoyed its record-shattering run on Wednesday as the KSE-100 index crossed 105,000 points helped by optimism about the global economy, moderating inflation, and political stability,” the newspaper quoted sources.
The market touched a fresh high and rose by almost 549 points led by the banking, energy, and technology sectors.
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This was a result of the boost relative to other indicators of economic growth such as the expectations of the continuation of the upward trajectory. Depending on the event risk mapped to the State Bank of Pakistan’s (SBP) monetary policy committee meeting announced for December, the investors looked forward to its policy rate decision.
Furthermore, based on the CPI, the inflation rate slowed down to 4,9 % in November this year compared to the same period of the previous year and gave much more space to the central bank to substantially reduce its policy rate.
The stock market closed at an all-time high led by the oil and energy sectors on the back of upbeat data on petroleum sales up 15 percent YoY and cement sales up 5.6 percent YoY in November as noted by Arif Habib Corp MD Ahsan Mehanti.
“We believe the frequent policy rate cuts in the upcoming days, stability in rupee, positive signs of a healthy economy in terms of exports, trade deficit, and external account played a catalyst to approach the record close from the PSX,” he said.
The closing yield showed the benchmark KSE-100 index increased by 545.26 points, or 0.52 percent, to 105,104.34.
Topline Securities, in its review, said that the KSE-100 index ended at a record high as the so-called bull run continued and touched the intra-day high of 10, 5474 points.
Bidding by local institutions remained consistently high and turnover remained high as investors were upbeat that the interest rate would come down in the next monetary policy meeting, it added.
Sectors contributing most to the index boost include Mari Petroleum, Hub Power, Airlink Communication, Millat Tractors, and Pakistan State Oil, which bumped up the total by 442 points.
Arif Habib Limited (AHL) said that the PSX ended trading slightly above the 105000 in what it described as a volatile session.
In the same year, 54 shares increased whereas, 44 decreased. Mari Petroleum, Hub Power, and Airlink Communication added the most to the index’s advance, it said.
On the flip side the major laggards were Habib Bank Limited, down (-2.51 %), MCB Bank down (-1.07 %) and Service Industries down (-3.47 %).
Some significant movement was observed in PTCL (+ 10%), PABC (+ 9.64%), and Biosciences (+ 7.82%).
The market is still higher with support at @the 100,000 level and throughout this period, AHL highlighted.
JS Global analyst Mubashir Anis Naviwala said that KSE-100 climbed to 105,104, which increased by 0.5% d/d on anticipations of an improving trade deficit and possible policy rate cuts due to tame inflation.
Many of the day’s most actively traded stocks included WorldCall Telecom Limited, Cnergyico PAKISTAN KSE, Pakistan International Bulk Terminal Limited, and Pak Elektron Limited.
There was a good performance highlighted in the key sectors which include the energy and petroleum sectors. Market turnover, which had crossed a handsome Rs 50 billion was a clear indicator of significant market participation which strengthened the bullish trend, according to Naviwala.
On a broad scale, total turnover was slightly down to 1.75 billion shares against 1.77 billion seen during the previous trading session of Tuesday. The overall turnover was Rs50.4 billion of shares traded by the end of the day.
There were 467 active trading securities companies to trade in shares. Among these 258 shares advanced, 180 declined and 29 remained flat.
WorldCall Telecom emerged as the most active counter with 257.5 million shares traded; up Rs0.14 to end at Rs1.61. Cnergyico PK was second with trading in 213.2 million shares, up Rs0.13 to Rs6.85, and Pakistan International Bulk Terminal was third with 89.7 million shares, up 41 paise to Rs8.57.
Foreign investors offloaded Rs627.6 million of shares during the day, stated NCCPL.
FAQs
Why is the PSX expected to rise above 105,000 points?
Investor optimism is being driven by various factors, including strong corporate earnings, expectations of interest rate cuts, and the privatization of state-owned enterprises (SOEs). There’s also a growing influx of foreign investment following Pakistan’s improved MSCI index weight.
What external factors are influencing this rise?
International influences like favorable negotiations with the IMF, and the assurance of fiscal stability through no new taxes or mini-budgets, have contributed to positive market sentiment. Moreover, the potential reduction in interest rates has fueled hopes of an easier borrowing environment.
What risks could hinder this growth?
While the outlook is positive, risks include political instability, any unexpected fiscal policy changes, or global economic shifts. These could dampen investor confidence, especially in the short term.