Bulls continue to rule PSX as KSE-100 index crosses 105,000 milestone

The bullish trend, ongoing for the past few weeks, continues today as investor confidence grows in the stock market.

PAKISTAN:

The Pakistan Stock Exchange (PSX) continued its bullish trend on Wednesday, reaching a new all-time high as investor confidence soared.

The benchmark KSE-100 index rose by 545.26 points, or 0.52%, on Wednesday, closing at 105,104.33 points, compared to the previous day's close.

The surge in stock prices has been attributed to growing optimism among investors, driven in part by expectations that the State Bank of Pakistan (SBP) will further reduce the policy rate due to the easing inflationary pressures in the country.

Earlier on Tuesday, the stock market extended its record-breaking spree as it soared to a fresh peak while traded value reached its highest level in 18 years at Rs57 billion.

The bullish momentum could be attributed to heightened investor optimism over a potential rate cut in the upcoming monetary policy meeting as well as the fall in inflation to the lowest level in six years.

Additionally, positive economic indicators such as the falling trade deficit and growing exports fuelled optimism. Market participation touched the high of 1.77 billion shares, where the most actively traded stocks were Cynergyico PK, WorldCall Telecom and Hascol Petroleum.

Ahsan Mehanti of Arif Habib Corp commented that bullish activity was driven by across-the-board trading in stocks as investors eyed a big policy rate cut next week after inflation fell to a six-year low.

He added that upbeat data showing a $8.65 billion trade deficit, down 7.4%, export growth of 12.57% to $13.69 billion for July-November and rupee stability played the role of catalysts in record surge at the PSX. At the end of trading, the benchmark KSE-100 index recorded an increase of 1,284.13 points, or 1.24%, to 104,559.07.

Topline Securities cited in its market review that bulls firmly took charge as the KSE-100 soared, reaching remarkable new milestones. The trade value in the ready market climbed to an impressive Rs57 billion ($203 million), marking the highest level in 18 years, it said.

"This bullish momentum is largely attributed to heightened investor optimism surrounding a potential big rate cut in the upcoming monetary policy meeting scheduled for December 16."

Topline said that Pakistan's trade deficit for November contracted 19% year-on-year to $1.59 billion, supported by a rise in exports and a decline in imports, adding to the positive sentiment. "This improvement has bolstered expectations of a robust current account surplus, further uplifting market confidence."

It added that key drivers of the rally included heavyweights such as Engro Corporation, Mari Petroleum, Pakistan Oilfields, Fauji Fertiliser Company and Dawood Hercules Corporation, collectively contributing 658 points to the index.

In its report, AHL commented that another 1% day-on-day gain moved the index towards 105,000 points. Some 69 shares rose while 28 fell with Engro Corporation (+6.14%), Mari Petroleum (+4.21%) and Pakistan Oilfields (+4.7%) being the biggest upside contributors.

On the other hand, Habib Bank (-2.3%), Systems Limited (-1.01%) and Meezan Bank (-0.81%) were the largest index drags.

Notable performers were Pak Elektron (+10%), Airlink Communication (+8.95%), Pakistan Refinery (+9.73%) and Sui Southern Gas Company (+9.69%), AHL said.

It noted that while the PSX was again entering the overstretched territory, the momentum remained very strong and further gains should be expected against support at 100,000 points.