Market participants at the Pakistan Stock Exchange (PSX) appeared to have eased their concerns over upcoming budgetary measures, as the benchmark KSE-100 index surged by over 550 points during trading on Wednesday.
By 2:05 PM, the benchmark index stood at 73,149.33, an increase of 559.84 points or 0.77%.
Experts believe that investors “overreacted” to rumors and unconfirmed reports, creating a buying opportunity after the market fell into oversold territory. Notable buying was observed in sectors including automobile assemblers, commercial banks, oil and gas marketing companies, and oil marketing companies (OMCs).
Index-heavy stocks such as OGDC, PPL, PSO, and SHEL traded positively.
“The market had been under concern amid news regarding budgetary measures, but these concerns seem to have largely subsided,” Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company (Private) Limited, told Business Recorder.
Mohammed Sohail, CEO of Topline Securities, noted that the “market overreacted to tax rumors” related to capital markets.
The government is set to present its first growth-oriented federal budget for the fiscal year 2024-25, with an estimated outlay of over Rs18 trillion, on June 12 (Wednesday). The budget will be presented before the National Assembly by Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb.
On Tuesday, the government’s economic survey revealed that Pakistan’s economy likely expanded by 2.4% in the fiscal year ending this month, missing the target of 3.5%. However, this was an improvement over last year’s contraction of 0.17% and aligned with the State Bank of Pakistan’s full-year projection, which recently cut its key interest rate by 150 basis points to stimulate the economy.
Globally, Asian shares were subdued on Wednesday after data showed that China’s consumer prices remained soft, while the dollar held firm ahead of a key US inflation report and Federal Reserve policy decision that will influence near-term interest rates. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.1%, while Japan’s Nikkei fell by 0.8%.
On Tuesday, a minor positive start following an expected policy rate cut was overshadowed by negativity at the PSX, as the benchmark index dropped 663 points to close below 73,000.
