PSX leaps 984 points after Eid

Rise in KSE-100 index driven by electricity tariff cut, easing inflation

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KARACHI:

Pakistan Stock Exchange (PSX) rebounded strongly in the shortened two-day trading week following Eidul Fitr holidays, with the benchmark KSE-100 index hitting a historic intra-day high of 120,797 points before closing at 118,791, up 984 points, or 0.8% week-on-week (WoW).

The rally was fueled by the prime minister's announcement of substantial electricity tariff cuts – Rs7.4/unit for residential consumers and Rs7.59/unit for industries – boosting investor confidence.

The bullish activity came despite lingering concerns over a 29% US tariff on Pakistani exports. On the macro front, optimism grew following a sharp decline in inflation, with March Consumer Price Index (CPI) easing to 0.7% year-on-year (YoY), the lowest in nearly six decades, and a narrowing trade deficit to $2.1 billion. The State Bank's reserves showed resilience, rising $70 million to $10.7 billion.

Foreign investors remained net buyers, injecting $7.38 million, mainly into banks, while local insurance firms and mutual funds booked profit. Average daily trading volumes jumped 54% WoW to 488 million shares, with traded value rose 30% to $113.6 million. On a day-on-day basis, following Eid holidays, the PSX began April on a cautious note amid concerns over the 29% US tariff on Pakistani exports. The KSE-100 index initially dipped to the intra-day low of 117,508, but rebounded sharply after the prime minister's anticipated power tariff reduction, sparking value buying. The index closed up 1,131 points at 118,938 on Thursday.

On Friday, the benchmark index briefly touched the 120,000 mark in intra-day trading, before settling at 118,792, down 146 points. Arif Habib Limited (AHL), in its weekly report, wrote that the two-day trading week following Eid holidays commenced on a positive note, with the KSE-100 index reaching an all-time intra-day high of 120,797 points on Friday.

The upward momentum was fueled by the prime minister's announcement of significant power tariff reductions of Rs7.4/unit for domestic consumers and Rs7.59/unit for industries. This positive development was overshadowed, to some extent, by concerns over the imposition of a 29% tariff on Pakistani exports by the US, it said. On the economic front, inflationary pressures continued to ease, with CPI for March 2025 dropping to 0.7% - the lowest in nearly six decades. Meanwhile, Pakistan's trade deficit showed signs of improvement, narrowing to $2.1 billion in March from $2.3 billion in the same month of last year, further supporting market sentiment.

Sector-wise, positive contribution to the KSE-100 index came from banks (1,791 points), cement (86 points), fertiliser (49 points), tobacco (30 points), and real estate investment trust (19 points). Meanwhile, the sectors that contributed negatively were exploration & production (410 points), power (103 points), oil marketing companies (88 points), leather & tanneries (81 points), and cable & electrical goods (45 points), AHL said.

Stock-wise, positive contributors were UBL (1,149 points), Meezan Bank (265 points), MCB Bank (123 points), HBL (105 points), and Bank AL Habib (51 points). Among individual stocks, negative contribution came from Hubco (128 points), OGDC (127 points), Pakistan Petroleum (122 points), and Pakistan Oilfileds (87 points).

Foreigners' buying continued during the week, which came in at $7.38 million compared to net buying of $3.92 million last week. Major buying was witnessed in banks ($5.45 million). On the local front, selling was reported by insurance companies ($8.82 million) and mutual funds ($6.54 million).

Among other major news, OGDC and Mari made new discoveries, the energy sector circular debt reached Rs4,700 billion, bank deposits decreased nearly 2% to Rs30 trillion in February, coal imports hit a three-year low and Lotte Chemical planned to suspend operations for inventory management, AHL added.

Topline Securities' weekly review said that the KSE-100 index gained 0.84% WoW, which could be credited to the cut in electricity tariffs by the government to support residential consumers and industries. Apart from that, other factors providing stimulus to the market included the CPI for March that stood at 0.7%, the lowest monthly YoY reading in over three decades, and Pakistan's March trade deficit, which reached $2.12 billion, down 8% month-on-month, it said.