The Pakistan Stock Exchange (PSX) on Monday continued its record-breaking rally on the back of positive economic indicators and a rally in the oil & gas sector, as the benchmark KSE-100 index crossed the 84,000 level during intra-day trading.
At 1:55pm, the KSE-100 Index was hovering at 84,574.68, an increase of 1,042.73 points or 1.25%.
A buying trend was witnessed in index-heavy sectors including automobile assemblers, cement, commercial banks, fertilizer, oil and gas exploration companies and OMCs. Index-heavy stocks including NBP, MEBL, FFBL, PPL, OGDC, SNGP, and PSO were in the green.
Experts have been attributing the buying spree to improved macroeconomic indicators and expectations of a further policy rate hike in the coming weeks. Additionally, Pakistan’s oil & gas sector has been on a roll.
“Amid a decline in the inflation rate and money market yields, the market is anticipating a policy rate decline of a larger quantum,” Sana Tawfik, Head of Research at Arif Habib Limited (AHL), told media.
“The market is gauging a decline of 150-200bps, and there is room for it,” she maintained.
The expert said that the momentum is expected to continue in the coming days. “The corporate result season will kick off from next week, which will further drive the market.”
The bullish momentum comes despite a surge in terror-related incidents in the country.
On Sunday, a convoy carrying Chinese staff of the Port Qasim Electric Power Company (Private) Limited was targeted in a terrorist attack near Karachi’s Jinnah International Airport. The attack killed two Chinese nationals and injured another.
“There is lack of clarity among the market participants regarding last night’s incident,” said Tawfik.
During the previous week, PSX witnessed a bullish trend and hit historic highest-ever levels on the back of local investor interest coupled with institutional support.
The benchmark KSE-100 surged by 2,239.83 points on week-on-week basis and crossed 83,000 psychological level for the first time in history to close at highest-ever level of 83,531.96 points.
Globally, Asian stocks rallied and the dollar reached a fresh seven-week peak on the yen on Monday after blowout US labour data dispelled fears of a recession and spurred a sharp paring of rate-cut bets.
Japan’s Nikkei led regional equity gains with a 2% rally as of 0015 GMT, given additional momentum by the softer yen.
MSCI’s broadest index of Asia-Pacific shares climbed 0.4%.
Bets for a super-sized 50-basis-point rate cut at the Federal Reserve’s next policy announcement on Nov. 7 – which had been above 50% a week ago – were completely erased after the payrolls report.
Instead, traders now lay 95% odds on a quarter-point cut, with a small chance that the policy rate stays unchanged, according to CME Group’s FedWatch Tool.
This is an intra-day update
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