Bulls drive PSX to new heights as KSE-100 index crosses 104,000 points

The Pakistan Stock Exchange (PSX) saw a significant surge on Tuesday, with the benchmark KSE-100 index rising by 1,284.13 points, or 1.24%, to close at 104,559.07.

This surge came after the release of data showing that Pakistan’s annual inflation rate fell to 4.9% in November, its lowest level in nearly six and a half years.

The market initially experienced a sharp decline, with the index dropping by 449 points in early trading. However, it quickly rebounded, reaching an intraday high of 104,445.80 points.

The lowest point recorded during the session was 102,825.59 points.

The trading volume for the day stood at 475,856,546 shares, with a total market value of Rs17,337,144,881.

The overall market sentiment remained optimistic, contributing to a steady rise in the index throughout the day.

Yesterday, the stock exchange boasted a remarkable surge of over 1,900 points on the back of positive economic data and investor optimism.

Analysts attributed the record bullish activity to the favourable Consumer Price Index (CPI) for November 2024, which showed an easing of inflation to 4.9% year-on-year, sparking expectations of a further cut in the State Bank of Pakistan's (SBP) policy rate.

This, coupled with a bull-run in global equities and an increase in foreign exchange reserves, caused significant market movement. By the end of trading, the KSE-100 index reached a new record high of 103,275 points.

The surge was supported by a record market participation and investor interest across key sectors, signalling optimism about continued economic recovery.

In his analysis, Ahsan Mehanti of Arif Habib Corp commented "stocks showed a record bullish activity amid upbeat data of CPI inflation, which stood at 4.9% year-on-year for November, resulting in likely further easing of the SBP policy rate." He added that a bull-run in global equities, strong economic data and surging forex reserves played the role of catalysts in bullish activity at the PSX.

At the end of trading, the benchmark KSE-100 index recorded an increase of 1,917.63 points, or 1.89%, to 103,274.95.

Topline Securities cited in its market review that bulls dominated the day, with the positive activity being attributed to the CPI falling below 5% for November, the lowest reading in 78 months. It commented that a record participation was observed as the traded value of Rs47 billion was the highest since May 2017.

In terms of traded value, Oil and Gas Development Company (Rs3.84 billion), Pakistan Petroleum Ltd (Rs1.93 billion), Pakistan State Oil (Rs1.44 billion), The Searle Company (Rs1.39 billion) and DG Khan Cement (Rs1.26 billion) dominated the activity. Point-wise, the top contributors were Engro Corporation, Fauji Fertiliser Company, Meezan Bank and Fauji Cement, which cumulatively added 617 points to the index. Investor interest was observed in the cement sector as it gained 4.7% on expectations of higher dispatch numbers for November. The declining interest rates provided a fresh stimulus to the sector, Topline added.

In its research report, AHL commented that the week started off on a strong note, with 83 shares rising and 14 falling. Engro Corporation (+6.61%), Fauji Fertiliser Company (+2.34%) and Meezan Bank (+4.67%) contributed the most to the index gains. On the downside, Oil and Gas Development Company (-1.79%), Bank Alfalah (-1.43%) and Pakistan Petroleum (-0.51%) were the biggest index drags, it said.

AHL pointed out that the CPI rose 4.9%, slightly above its expectations of 4.7%, which took 5MFY25 average inflation to 7.9% vs 28.6% in the same period of last year.

It added "support now builds at 100k, against which the path of least resistance is to the upside." JS Global analyst Mubashir Anis Naviwala wrote that the KSE-100 index was bolstered by improving macroeconomic indicators and heightened expectations of further monetary easing. Traded volumes also showed a significant improvement as they reached 1,556 million shares.

Naviwala said they expected the bullish trend to persist, mainly due to the improved economic indicators coupled with the declining fixed-income yields.

Overall trading volumes increased to 1.6 billion shares against Friday's tally of 915.5 million. The value of shares traded during the day was Rs47.1 billion.

Shares of 462 companies were traded. Of these, 339 stocks closed higher, 85 fell and 38 remained unchanged.

WorldCall Telecom was the volume leader with trading in 213.5 million shares, increasing Rs0.09 to close at Rs1.46. It was followed by Cnergyico PK with trading in 196.9 million shares, gaining Rs1 to close at Rs5.72 and Fauji Foods with 68.3 million shares, gaining Rs0.96 to close at Rs13.62. During the day, foreign investors sold shares worth Rs771.3 million, according to the NCCPL.