The stock market started the week on a renewed momentum, buoyed by strengthening economic fundamentals, sectoral performance and sustained investor optimism.
In the unprecedented area, the market rally indicates growing confidence in macroeconomic stability, underpinned by key policy reforms and improvement in financial indicators, which signal the potential for continued growth.
The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) climbed further on Monday, adding 1,860.12 points to hit a fresh high of 103,217.44 during intraday trading.
This represents a gain of 1.44% from the previous close of 101,357.32, as the market continues to benefit from the positive momentum that crossed the 100,000 point milestone last week.
“Positive momentum continued to be observed over the past week and earlier, helped by improving macroeconomic factors,” said Sana Tawfiq, head of research at Arif Habib Ltd.
“With inflation expected to be at its lowest level since April 2018, we expect it to remain at around 4.7%, and improving market liquidity, all factors are boosting market performance,” he added. are.”
One of the developments that bolstered market sentiment was the receipt of $500 million from the Asian Development Bank (ADB) as part of the Climate Change and Disaster Resilience Enhancement Program.
These inflows have strengthened Pakistan’s foreign exchange reserves to close to $12 billion. Analysts see this as a key factor in easing economic uncertainty and boosting investor optimism.
Sectoral performance has been key to the index’s gains, with commercial banks leading the charge by contributing 1,675 points last week.
The abolition of minimum deposit rate (MDR) requirement for corporate deposits further boosted the banking sector, which continued to attract substantial investor interest.
The technology and communications, oil and gas exploration, and property sectors also posted strong gains last week, reflecting broad market participation.
“Continued decline in yields and investor movement from fixed income to equities are accelerating the market,” noted Samiullah Tariq, head of research at Pak-Kuwait Investment Company.
Market analysts attribute the rally to the government’s decisive economic reforms and bright inflation outlook, with estimates that inflation could fall to 5.6%-6.5% by December.
The development has raised expectations that it could lead to further interest rate cuts by the State Bank of Pakistan (SBP), which would boost investor confidence.
Low inflation expectations coupled with a significant interest rate cut by the SBP in early November have created a favorable environment for equity markets.
Average daily trade value on the ready counter rose 7.1 percent week-on-week to Rs 36.85 billion, while foreign investors withdrew $15.1 million due to strong buying by local insurance companies.
Today’s rise follows the index breaching the unprecedented 100,000-point mark last week, which closed at an all-time high of 101,357.32 on Friday.
The outgoing week saw the market gain 3,559.09 points on a weekly basis on a combination of domestic investor enthusiasm and institutional support.
Despite the decline, the market recovered strongly, demonstrating resilience amid political volatility and a favorable regulatory environment.
As PSX continues to push into uncharted territory, the outlook remains optimistic.
Analysts believe that consistent policy support, stabilizing external accounts, and falling cost of doing business will maintain the market’s upward momentum.
This is a developing story and will be updated with more details.