PTBP Web Desk
The Pakistan Stock Exchange (PSX) continued its bullish trend on Monday, with the benchmark KSE-100 Index experiencing a significant surge. During intra-day trading, the index climbed over 1,000 points, reflecting renewed investor confidence.
At 3:30 PM, the KSE-100 Index was recorded at 114,447.00, marking an increase of 1,199.71 points or 1.06%. This surge was led by notable buying activity across several key sectors, including:
- Automobile assemblers
- Cement
- Chemical
- Commercial banks
- Fertilizer
- Oil and gas exploration companies
- Oil marketing companies (OMCs)
Prominent stocks that traded in the green included SSGC, SHEL, PSO, OGDC, PPL, POL, ENGRO, HBL, MEBL, and NBP.
According to a note by Intermarket Securities, investor focus is now shifting towards the upcoming Monetary Policy Committee (MPC) meeting. The market anticipates a 100 basis point (bps) cut, bringing the policy rate down to 12%. This expectation has bolstered investor sentiment, as it hints at the possible conclusion of the current easing cycle.
Additionally, the earnings season is set to commence soon. While bank payouts are expected to uplift market sentiment, results from cyclical sectors may fall short of expectations.
The preceding week painted a starkly different picture, as the PSX faced significant selling pressure. The benchmark KSE-100 Index plunged by 4,339.69 points on a week-on-week basis, closing at 113,247.29 points. Investors offloaded their holdings amid available margins, leading to heavy losses.
On a broader scale, Asian markets showed a mixed performance on Monday. Asian shares slipped, while the US dollar hovered near its 14-month peak, following a strong payroll report. This development pushed bond yields higher, testing elevated equity valuations as the earnings season began.
- Yields on 10-year US Treasuries rose to a 14-month high of 4.79%, settling at 4.764% during Asian trading hours.
- Expectations for Federal Reserve rate cuts have been scaled back to just 27 basis points for 2025, with the terminal level now projected at 4.0%, compared to 3.0% previously anticipated.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan edged down by 0.4%. A holiday in Japan led to thin trading activity, with Nikkei futures trading lower at 38,770 compared to a cash close of 39,190.
The bullish sentiment at PSX was largely driven by robust activity in key sectors:
- Automobile Assemblers: Increased investor interest pushed prices higher, reflecting optimism about domestic demand.
- Cement and Construction: Anticipation of infrastructure development projects contributed to gains in this sector.
- Banking: Major banks like HBL and MEBL traded positively, benefiting from improved liquidity conditions.
- Oil and Gas Exploration: Companies such as OGDC and PPL gained as global oil prices remained steady.
Market participants remain optimistic about the upcoming Monetary Policy Committee meeting. A potential rate cut could provide a much-needed boost to corporate profitability and investor confidence.
Moreover, the start of the earnings season is expected to bring mixed results. While banks may deliver strong payouts, cyclical sectors are anticipated to face challenges due to prevailing economic conditions.
Analysts suggest that the market’s performance in the coming weeks will depend heavily on:
- The outcome of the MPC meeting.
- Corporate earnings, particularly in banking and cyclical sectors.
- Global economic trends, including Federal Reserve policies and US bond yields.
For investors, the current market offers strategic opportunities to capitalize on bullish momentum in specific sectors. Stocks in banking, oil and gas, and cement sectors could provide lucrative returns, given the ongoing recovery in investor sentiment.
