PSX extends record streak amid bullish market sentiment
1. KSE-100 Index climbs to new record high of 102,288.71, up by 931.39 points, or 0.92%, from previous close
The stock market kicked off the week with renewed momentum, driven by strengthening economic fundamentals, strong sector performance, and continued investor optimism.
In an unprecedented move, the market’s rally highlights growing confidence in macroeconomic stability, fueled by key policy reforms and improving financial indicators, signaling continued growth potential.
On Monday, the Pakistan Stock Exchange (PSX) benchmark KSE-100 Index surged by 931.39 points, reaching a new intraday high of 102,288.71. This represents a 0.92% increase from the previous close of 101,357.32, continuing the positive momentum that saw the index surpass the 100,000-point milestone just last week.
One key development boosting market sentiment was the receipt of $500 million from the Asian Development Bank (ADB) under the Climate Change and Disaster Resilience Enhancement Program. This inflow has strengthened Pakistan's foreign exchange reserves, bringing them close to the $12 billion mark, which analysts see as crucial in reducing economic uncertainty and boosting investor confidence.
Sector performance has played a significant role in the index's rise, with commercial banks leading the charge by contributing 1,675 points last week. The removal of the Minimum Deposit Rate (MDR) requirement for corporate deposits further supported the banking sector, which has been drawing strong investor interest.
Other sectors, including technology and communication, oil and gas exploration, and property, also saw substantial gains last week, reflecting broad market participation.
Analysts attribute the rally to the government’s decisive economic reforms and a more favorable inflation outlook, with projections suggesting inflation could fall to 5.6%-6.5% by December. This has fueled expectations of a potential interest rate cut by the State Bank of Pakistan (SBP), which has further boosted investor confidence.
The combination of lower inflation expectations and the SBP’s significant interest rate cut in November has created a favorable environment for the equity markets.
The average daily traded value on the ready counter rose by 7.1% week-on-week, reaching Rs 36.85 billion. Foreign investors withdrew $15.1 million, but this was offset by strong buying from local insurance companies.
Today’s rise follows the PSX surpassing the 100,000-point mark last week, closing at its then-highest level of 101,357.32 on Friday. The previous week saw the market surge by 3,559.09 points, driven by a mix of local investor enthusiasm and institutional support.
Despite some dips, the market showed resilience, recovering strongly amid political volatility and a favorable regulatory environment. As the PSX continues to break new ground, the outlook remains optimistic.
Analysts believe that sustained policy support, stabilized external accounts, and reduced business costs will keep the market on its upward trajectory.
