The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index gained over 450 points during morning trade on Monday, which analysts attributed to what seemed like an improved outlook in the economy.
The optimism in the market came as the government announced a reduction in fuel prices, slashing the prices of petrol and high-speed diesel by Rs8 per litre and Rs11 per litre, respectively, for the next fortnight.
It also follows a weeks-long rally of the Pakistani rupee. It appreciated by Rs1.06 to reach 286.68 against the dollar during morning trade, according to Forex Association of Pakistan data.
The index reached 46,683.13 points at 12:20pm, a rapid climb up by 450.54 points or 0.97 per cent from the previous close of 46,232.59 points.
Analysts weigh in
Raza Jafri, head of equity Intermarket Securities, said: “The KSE-100 is reacting positively as it becomes clear that there will be a continued focus on the economy from all key stakeholders. The CPI [consumer price index] print for September, due later today, will be interesting to monitor as it is possible the market chooses to ignore a likely high reading in favour of an improving outlook.”
Syed Faran Rizvi, head of equity sales at JS Global Capital, said: “The equity market’s positive momentum has been sustained due to reduced POL product costs and the strengthening of the PKR.”
He added: “Looking ahead, investor sentiment will likely hinge on the IMF review and actions taken in the energy sector.”
Ahsan Mehanti, chief executive of Arif Habib Commodities, noted the main bull market drivers to be the IMF review meetings this month for the next tranche release and an “upbeat growth outlook”.
He added: “Upbeat data on crop output, cotton production, power generation, fertiliser, autos, POL and cement sales in September ’23, the rupee recovery and government deliberations on privatisation of SOEs [state-owned enterprises] played a catalyst role in the bullish activity.”
More to follow
