Stock exchange continues surge, hits new all-time high

The Pakistan Stock Exchange (PSX) has continued its upward trend, with the KSE-100 index reaching a new all-time high of 90,871 points during intra-day trading.

The bullish momentum from the previous week continued on the first business day of the current week with trading commencing with a surge of 646 points, pushing the KSE-100 index to a level of 90,640 points.

The positive trend persisted, and the index ultimately touched a peak of 90,871 points, gaining a total of 877 points.

The Pakistan Stock Exchange also saw significant gains last week, with the index surpassing 89,000 and reaching the new milestone of 90,000 points.

Earlier, The precious metal, gold, has emerged as a safe haven for the global investor community, including in Pakistan, claiming the crown as the world's most valuable asset.

The centuries-old global asset has gained over one-third of its total value in just the past year, soaring to a record high of $2,758 per ounce (31.10 grams) last week.

Although the bullion is expected to extend its rally towards the next thresholds of $2,800-3,000 per ounce (significantly over Rs300,000-350,000 per tola, or 11.66 grams in Pakistan) in the medium to long term likely in 2025 experts anticipate a major correction of $300-500 per ounce around the first quarter (Jan-Mar) of 2025.

Some small profit-taking is also expected between now and the end of December 2024.

Earlier on Friday, The Pakistan Stock Exchange (PSX) achieved a historic milestone Friday as the KSE-100 index touches the 90,000-point threshold in intra-day trading.

The index reached 90,087.41 points at 10am, marking a 1,109.73-point gain, or 1.25%, from the prior close of 88,945.98.

Continuing its bullish momentum throughout the week, the index surpassed the 89,000 mark in Thursday’s session, underscoring sustained market optimism.

Investor sentiment surged due to positive economic reforms and government initiatives, with 62,341,937 shares traded, reflecting strong market participation.

The value of shares traded reached Rs5,057,954,342.

The rally is driven by the fact that Pakistani stocks remain undervalued compared to regional markets. The KSE-100 index currently trades at an average price-to-earnings (P/E) ratio of 5.3, significantly below the regional average of 12-15, making it attractive for both local and foreign investors.

Additionally, analysts expect the State Bank of Pakistan (SBP) to announce a reduction in interest rates, spurred by signs of moderating inflation. Yields on government bonds have already declined by 100-150 basis points, signalling that the market has priced in potential rate cuts. Lower borrowing costs could further accelerate economic activity and boost corporate profitability, making equities an even more appealing investment avenue.

The market anticipates the interest rates to be around 14% by end December, with two remaining Monetary Policy Committee (MPC) meetings for the year. A cumulative reduction of 350 basis points seems likely, driven by easing inflationary pressures and a global trend of monetary loosening. Central banks, including the Federal Reserve and the European Central Bank (ECB), are leading a wave of rate cuts amid concerns over a global economic slowdown. The recent cooling of commodity prices, such as oil, further supports the case for domestic rate cuts, as recession fears weigh on global markets.

Institutional and high net worth buyers shifting gear