Bullish momentum continued at the Pakistan Stock Exchange (PSX) as the KSE-100 index breached the historic 69,000 mark during Monday’s trading session.
At 12:10 pm, the benchmark index stood at 69,329.65, marking a notable increase of 912.87 points or 1.33%.
The surge in buying activity was particularly notable in the energy sector, with prominent companies like OGDC, PPL, PSO, SSGC, and SNGPL witnessing gains.
Analysts attributed the rally to a decline in inflation figures, with March 2024 numbers registering at 20.68% year-on-year. This decrease led to positive real interest rates for the first time in 38 months, fueling speculation of a potential policy rate cut by the central bank.
Moreover, foreign investors and institutions contributed to the market’s momentum by injecting additional liquidity through buying.
Tahir Abbas, Head of Research at Arif Habib Limited (AHL), highlighted additional factors driving market optimism. He pointed out Prime Minister Shehbaz Sharif’s visit to Saudi Arabia, raising hopes for potential bilateral agreements. Additionally, Finance Minister’s plans to attend the IMF/WB spring meeting in Washington to negotiate for a new program vital for Pakistan’s long-term sustainability also buoyed market sentiment.
The previous week witnessed a bullish trend, supported by healthy buying from both local and foreign investors, along with institutional backing. The KSE-100 index experienced a significant surge of 1,274.66 points on a week-on-week basis, closing at 68,416.78 points.
Globally, Asian markets experienced fluctuations on Monday as traders assessed the likelihood of the Federal Reserve cutting interest rates this year. A better-than-expected US jobs report on Friday boosted Wall Street’s main indexes, with investors focusing on positive economic indicators rather than the implications for monetary policy.
However, some observers cautioned that the strong job figures, accompanied by a decline in unemployment and robust wage growth, might dissuade the Fed from implementing the three rate cuts anticipated for 2024, as previously suggested.
Traders are now eagerly awaiting the release of minutes from the central bank’s recent meeting, as well as the latest consumer price index reading, for further insights into future monetary policy decisions.
