KARACHI: The Pakistan Stock Exchange (PSX) experienced a historic bullish rally last week. The KSE-100 index crossed the 119,000 mark during intra-day trading and closed at 118,442 points. This reflects a weekly gain of 2,906 points (2.5%).
Investor confidence remained strong due to optimism about a staff-level agreement between Pakistan and the International Monetary Fund (IMF). The market opened the week with a 663-point gain on Monday. On Tuesday, the index climbed another 801 points, driven by positive economic developments. By Wednesday, the rally pushed the index to 117,974 points, adding 973 points.
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The momentum peaked on Thursday as the index surpassed 119,000 during intra-day trading, marking six consecutive days of gains. However, on Friday, profit-taking led to a 328-point drop. This decline came after the government’s decision to increase profit rates on National Savings Schemes (NSS).
Despite the dip, the KSE-100 index ended near an all-time high. Analysts credited strong institutional buying, power-sector reforms, and economic optimism for the market’s performance.
Key Market Drivers
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IMF Deal Progress: Investors remained optimistic about an upcoming IMF agreement, which could lead to additional funding.
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Power-Sector Reforms: The government proposed a Rs8 per unit reduction in electricity tariffs to address circular debt.
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Economic Indicators: The current account deficit shrank by 97% month-on-month in February. Meanwhile, State Bank reserves rose to $11.1 billion, but large-scale manufacturing (LSM) declined by 1.2% year-on-year in January.
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Sector Performance: Exploration & production added 1,086 points, followed by technology (+416 points), power (+273 points), oil marketing companies (+213 points), and cement (+202 points). The fertilizer sector declined by 105 points, while insurance dropped 6 points.
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Foreign Investment: Foreign investors sold $7.96 million worth of shares, mainly in commercial banks ($2.9 million) and exploration & production ($2.3 million).
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Market Outlook
Experts expect the bullish trend to continue if economic stability holds and the IMF deal is finalized. However, global oil prices, monetary policy, and foreign investments will play a crucial role in the market’s future performance.
Bloom Insight
The PSX’s record-breaking rally reflects strong investor confidence and economic optimism, driven by IMF deal expectations and power-sector reforms. However, profit-taking and global market trends could influence future momentum.
