PTBP Web Desk
The Stock Exchange (PSX) continued its upward trajectory on Wednesday, with the benchmark KSE-100 Index crossing the 105,000 mark during the early hours of trading.
This milestone reflects growing investor confidence, driven by expectations of further cuts to the key policy rate by the State Bank of Pakistan (SBP).
At 10:20 am, the KSE-100 Index stood at 105,415.91 points, marking an increase of 856.84 points or 0.82%. Key sectors, including oil and gas exploration companies, oil marketing companies (OMCs), power generation, and refineries, witnessed significant buying activity. Among the top-performing stocks were HUBCO, PSO, SSGC, PARI, OGDC, PPL, MEBL, and MCB, which traded in the green and contributed to the bullish momentum.
The current market rally is fueled by heightened optimism surrounding the upcoming monetary policy meeting, scheduled for December 16, 2024. Investors are anticipating a substantial policy rate cut, which could further boost market performance. According to a survey released by Topline Securities on Tuesday, the central bank is likely to reduce the key policy rate by at least 200 basis points (bps), reflecting the slowing pace of inflation and improved economic indicators.
Topline Securities highlighted that real interest rates in Pakistan stood at 1,010bps in November 2024, significantly above the historic average of 200-300bps. This gap has reinforced expectations for a rate cut, as the SBP aims to align its monetary policy with current economic conditions. Slowing inflation, coupled with signs of economic recovery, has strengthened investor confidence in the market’s upward trajectory.
On Tuesday, the PSX achieved a historic milestone as the KSE-100 Index surged by nearly 1,300 points, closing above 104,000 for the first time. This remarkable performance underscores the bullish sentiment prevailing in the market, driven by both domestic and global factors.
The oil and gas sector, a key driver of the KSE-100 Index, has benefited from improved investor sentiment. Oil and gas exploration companies and OMCs have seen robust activity, with major players like OGDC and PPL posting significant gains. Similarly, the power generation and refinery sectors have attracted considerable interest, reflecting expectations of sustained economic growth and stable energy demand.
While the PSX exhibited a strong performance, global markets presented a mixed picture on Wednesday. Asian equities stumbled amidst political turbulence in South Korea, where martial law was briefly imposed and later lifted. The South Korean won, buoyed by suspected intervention, strengthened in early trading but remained close to a two-year low against the US dollar. Meanwhile, the benchmark KOSPI index fell nearly 2%, extending its year-to-date losses to over 7%, making it Asia’s worst-performing major stock market.
The MSCI’s broadest index of Asia-Pacific shares outside Japan, which includes top constituents like Samsung Electronics, declined 0.32% on Wednesday. This contrast highlights the PSX’s resilience amid regional volatility, reinforcing its appeal to both local and international investors.
The positive momentum in the KSE-100 Index is expected to continue, provided that the SBP delivers on market expectations for a significant rate cut. A reduction in the policy rate would lower borrowing costs, enhance corporate profitability, and attract greater investment into the equity market. Additionally, sustained economic reforms and improved macroeconomic indicators will be crucial in maintaining investor confidence and driving long-term market growth.
