PSX bounces back to settle above 99,000 after political turmoil

The stock market saw its largest-ever single-day points increase, recovering nearly half of the previous day's losses

The Pakistan Stock Exchange (PSX) made a dramatic recovery on Wednesday, rebounding from the previous day's massive loss, as the benchmark KSE-100 Index surged by a record-breaking 4,695.09 points, or 4.96%, to settle at 99,269.25 points.

This marked the largest-ever single-day points increase in the PSX's history, recovering nearly half of the losses incurred the day before.

The rally was fueled by a combination of factors, notably a reduction in political unrest after Pakistan Tehreek-e-Insaf (PTI) concluded its three-day protest in Islamabad following a law enforcement crackdown.

The situation had caused significant investor concern, leading to a 3,500-point drop on Tuesday, the largest single-day decline in PSX history. Bulls made a strong comeback as investors responded positively to the government's decisive actions.

The KSE-100 hit an intra-day high of 99,549.81, driven by widespread buying across multiple sectors. The banking sector, in particular, led the charge, with index-heavy stocks like Habib Bank Limited (HBL), National Bank of Pakistan (NBP), and MCB Bank, among others, posting gains.

The rally also extended to automobile assemblers, oil and gas companies, and power generation firms, including OGDC, Sui Southern Gas Company (SSGC), and Hub Power Company (HUBCO).

The recovery was also aided by a positive shift in monetary policy. The State Bank of Pakistan (SBP) announced the removal of the Minimum Profit Rate (MPR) requirement for conventional banks on deposits from financial institutions and public sector enterprises, a move aimed at encouraging liquidity.

Additionally, SBP directed Islamic banking institutions to distribute at least 75% of the weighted average gross yield from their investment pools as profit on savings deposits.

The positive momentum was a stark contrast to the political unrest earlier in the week. The previous day saw the KSE-100 drop sharply as tensions escalated after the Pakistan Army was deployed to quell the PTI protest, which had turned violent.

The situation calmed following a late-night police and Rangers operation to clear protestors from Islamabad’s Blue Area and D-Chowk.

Trading volume on the all-share index dropped slightly to 1.057 billion shares from 1.116 billion on Tuesday, with a total value of Rs39.55 billion, down from Rs43.29 billion.

Bank of Punjab (BOP) led the volume chart with 114.97 million shares traded, followed by Hascol Petroleum with 106.29 million shares, and K-Electric with 91.2 million shares.

Of the 453 companies traded on Wednesday, 356 saw their stock prices increase, 52 saw declines, and 45 remained unchanged.

On the currency front, the Pakistani rupee saw a minor decline against the US dollar, depreciating by 0.04% to close at 277.96 in the inter-bank market.