PTBP Web Desk
The Pakistan Stock Exchange (PSX) witnessed remarkable growth on Monday as the benchmark KSE-100 Index surged by over 2,000 points during intra-day trading. This rally pushed the index above the significant 116,000 mark, reflecting strong investor confidence and anticipation of monetary easing.
At 1:55 PM, the KSE-100 Index was recorded at 116,585.81 points, marking a substantial gain of 2,284.01 points or approximately 2%. The surge highlights the robust buying momentum across key sectors such as automobile assemblers, cement, fertilizers, and oil and gas exploration companies.
The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is scheduled to meet later in the day. Market expectations suggest a further cut in the policy rate, continuing the trend of monetary easing that began in June 2024.
With the Consumer Price Index (CPI) remaining below the 5% threshold and recent Treasury bill (T-bill) yields showing significant drops—12% for three-month and six-month papers, down by 100 basis points (bps) and 89 bps, respectively—investors are optimistic.
This confidence is reflected in the robust buying across several sectors, as lower interest rates typically reduce the cost of borrowing, boosting business activity and equity valuations.
Key sectors driving Monday’s gains included:
- Energy Stocks: Prominent energy companies such as Mari Petroleum (MARI), Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL), Pakistan State Oil (PSO), Sui Northern Gas Pipelines Limited (SNGPL), and Sui Southern Gas Company (SSGC) traded in the green.
- Other Gainers: Automobile assemblers, cement producers, fertilizers, and oil marketing companies (OMCs) also witnessed substantial buying interest.
However, commercial banks and power generation stocks faced selling pressure, with key players like Habib Bank Limited (HBL), MCB Bank, Meezan Bank Limited (MEBL), and National Bank of Pakistan (NBP) trading in the red.
The PSX maintained its record-breaking momentum last week, closing at an all-time high. The KSE-100 Index gained an impressive 5,247.85 points on a week-on-week basis, ending at 114,301.80 points, setting a new historical benchmark.
The surge was primarily fueled by the strong interest of local investors and institutional support, highlighting the resilience of Pakistan’s equity market amidst global economic uncertainty.
While the PSX rallied, Asian stock markets showed mixed performance on Monday. The broader MSCI Asia-Pacific Index (excluding Japan) remained flat, reflecting cautious investor sentiment due to rising bond yields and the anticipation of major central bank meetings.
The US Federal Reserve is expected to announce a 25-basis-point rate cut during its meeting on Wednesday. Markets are also keenly awaiting the Fed’s forward guidance on future rate policies, including the “dot plot” projections for the coming years.
- Japan’s Nikkei: Gained marginally by 0.1%.
- South Korea’s Market: Stabilized amid government support pledges.
Pakistan’s headline inflation has remained below the critical threshold of 5%. This aligns with the recent disinflationary trends seen globally, as softening commodity prices, particularly in the oil market, contribute to easing price pressures.
Oil prices have shown a marginal decline, hovering above $70 per barrel due to soft demand. Lower global energy prices are particularly beneficial for Pakistan, an energy-importing country, reducing the burden on foreign reserves and fiscal balances.
Pakistan’s current account surplus stood at $349 million in October 2024, compared to a deficit of $287 million in the same period last year. This marks the third consecutive month of surplus, driven by improved exports and remittances.
