PSX breaks historic barrier as KSE-100 soars past 89,000 mark

The Pakistan Stock Exchange (PSX) reached a new milestone on Thursday, as the benchmark KSE-100 index soared to an unprecedented close of 88,945.98, marking an increase of 1,751.45 points, or 2.01%. 

During trading, the index peaked at an all-time high of 89,126.15, highlighting the market's robust performance. Investor enthusiasm has been primarily driven by anticipations surrounding the upcoming monetary policy meeting set for November 4. 

Analysts from Topline Securities noted that expectations of two significant interest rate cuts have prompted a surge in buying activity, propelling the index to its historic peak. Additionally, investors appear to be reallocating funds from fixed-income investments into equities, further enhancing market momentum.

An AHL survey indicated that many market participants are expecting a reduction of up to 200 basis points in the key policy rate during the upcoming Monetary Policy Committee (MPC) meeting. 

Major contributors to the index's surge included FFC, UBL, OGDC, EFERT, and MCB, collectively adding 935 points to the benchmark. UBL led the trading volume, with Rs3.1 billion exchanged, followed closely by ATRL at Rs2.5 billion and OGDC at Rs1.9 billion.

The cement sector also saw significant interest, with companies like GWLC, ACPL, PIOC, KOHC, and CHCC all closing higher in anticipation of the monetary policy meeting.

Market analysts attribute this buying frenzy to a combination of factors, including expectations of lower yields on government securities and positive corporate earnings reports.

Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company (Private) Limited, stated that the expected policy rate cuts and declining government security yields are fueling the shift towards equities. 

Mohammed Sohail, CEO of Topline Securities, echoed these sentiments, noting that aggressive institutional buying has driven the market higher amid hopes for substantial rate reductions in the upcoming monetary policy meetings.

The PSX experienced a record trading volume of Rs53 billion (approximately $190 million) on Thursday, indicating a growing confidence among investors. 

According to Arif Habib Limited (AHL), this impressive performance reflects a year-to-date gain of 41.0% in 2024, making it the fourth-best performing equity market globally, with an 8.5% month-over-month increase.

The upward momentum at the PSX follows a strong buying trend earlier in the week when the benchmark index crossed the 87,000 threshold for the first time, closing at 87,194.53 on Wednesday.

Trading volume on the all-share index increased to 757.65 million from 699.29 million the previous day, while the total value of shares traded rose to Rs36.05 billion from Rs26.82 billion.

Meanwhile, the Pakistani rupee experienced a slight decline against the US dollar, depreciating 0.04% in the inter-bank market to settle at 277.84, a loss of Rs0.11.