On Wednesday, the Pakistan Stock Exchange (PSX) trade floor was dominated by bulls as shares increased by almost 800 points, hitting a record high.
At 12:01 pm, the KSE-100 index was up 704 points, or 1.05 percent, from the previous closing of 66,886.26 points to 67,590.26 points. It increased by 869.77, or 1.3 percent, from the previous close to close at 67,756.03.
The benchmark KSE-100 reached an intraday high of 67,246.02 points on March 28 before closing at a record high of 67,142.12. It surpassed both of those levels today.
Significant advances were reported in industries such commercial banking, cement, transportation, technology, and communication, according to the PSX website.
The 22-month lowest inflation number, which was below the Ministry of Finance’s prediction of 23.5 percent, was the reason for the index’s slight advances the day before, according to analysts. This increased hopes for a decrease in the State Bank’s policy rate the following month.
Mohammed Sohail, CEO of Topline Securities, stated in a statement to Dawn.com today that the market was becoming more confident after “seeing good progress on the privatization” of Pakistan International Airlines (PIA) and foreign portfolio investment in official documents.
He stated, “With expectations of a rate cut in the coming months, cement stocks are in the spotlight today.”
“The decline in inflation figures signals economic resilience, leading investors to anticipate interest rate cuts of at least 150 basis points,” stated Faran Rizvi, JS Global’s head of stock sales.
But he also said that markets were still trading “at very low multiples, especially in the oil and gas and banking sectors, which are currently undervalued compared to historical norms.”
We also spot opportunities to trade cement stocks. The financial strain on these businesses will lessen as interest rates drop, and a natural increase in demand will support the maintenance of favorable trading conditions for the sector’s stocks, the speaker added.
The same opinions were expressed by Chase Securities’ director of research, Yousuf M. Farooq. He explained the gains as a result of growing anticipation following the inflation decline of a rate cut.
“Moreover, cyclicals have rallied as a result of cement sales figures for the past month exceeding market expectations,” he stated.
The upward trajectory, according to Shahab Farooq, director of research at Next Capital Limited, was driven by both the country’s overall outlook as it moves toward a longer and larger International Monetary Fund (IMF) program and “foreign portfolio investment in Pakistan’s rupee-denominated government papers,” which showed confidence on the rupee-dollar parity among foreign investors.
He also pointed out that market sentiment was bolstered by PIA’s eventual privatization and restructure.
