PSX climbs 515 points on improved rating

KARACHI:

The Pakistan Stock Exchange (PSX) ended the week on a strong note on Friday, with the benchmark KSE-100 index gaining over 500 points to close slightly above 139,200.

The rally came as investor sentiment was lifted by S&P Global Ratings' upgrade of Pakistan's sovereign credit rating to 'B-' with a stable outlook, reflecting improved macroeconomic stability and sustained IMF support. Expectations of a 50-basis-point rate cut in the upcoming monetary policy meeting on July 30 further fueled optimism.

Broad-based buying was observed, particularly in banks, energy firms and autos, with Engro (+3.53%), UBL (+0.71%) and Lucky Cement (+1.43%) making the largest contribution to index gains. Meanwhile, HBL (-0.67%), Allied Bank (-3.93%) and MCB Bank (-0.58%) were the major drags.

On a weekly basis, the KSE-100 rose 0.44% week-on-week, having tested a high of 140,200. Analysts believe the upside remains intact with a near-term target of 140,500, while support is around the 137,200-138,200 zone.

Stocks closed bullish after S&P Global lifted credit rating to 'B-' amid bilateral support, IMF reforms and improved fiscal indicators, Arif Habib Corp MD Ahsan Mehanti said. Speculation about likely SBP policy easing next week amid a slide in government bond yields drove the bullish close at the PSX, he said.

At the end of trading, the KSE-100 index recorded an increase of 514.62 points, or 0.37%, and closed at 139,207.29.

Arif Habib Limited (AHL) commented that in the final trading session of the week, the PSX saw a mixed performance, with 54 stocks rising and 45 declining.

Market sentiment was buoyed by S&P Global Ratings' upgrade of Pakistan's credit rating to 'B-', which lifted both equities and dollar bonds. The 2036 Eurobond gained 0.5 cent, trading at $86.14, with most other maturities also extending their upward momentum, it said.

Looking ahead, all eyes are on the State Bank of Pakistan's monetary policy meeting scheduled for July 30, where a 50-basis-point rate cut is widely expected, which will bring policy rate to 10.5% amid declining inflation and a stable external position, AHL added.

Topline Securities, in its review, wrote that the market after remaining sluggish for the last two trading sessions returned to its positive course, as the KSE-100 index closed at 139,207, up 0.37%. Top positive contribution to the index came from Engro Holdings, UBL, Lucky Cement, Meezan Bank, NBP, Atlas Honda and Systems Limited as they cumulatively contributed 541 points.

Traded value-wise, Hubco (Rs1.18 billion), Engro Holdings (Rs1.17 billion), HBL (Rs734 million), The Bank of Punjab (Rs691 million), NBP (Rs564 million), UBL (Rs547 million) and DG Khan Cement (Rs533 million) dominated the trading activity.

Muhammad Hasan Ather of JS Global noted that the KSE-100 closed on a positive note, gaining 515 points. Investor sentiment was buoyed by S&P Global's upgrade of Pakistan's sovereign credit rating to 'B-' with a stable outlook, reflecting improved fiscal stability and IMF support.

Buying was broad-based, led by banks, energy and autos. Looking ahead, expectations of a policy rate cut in the upcoming meeting may support the rally, though global uncertainty and fiscal risks remain key watch points, Ather said.

Total trading volumes reached 634.8 million shares, slightly lower than the previous session's 648.8 million. The day's traded value stood at Rs24.6 billion. Out of 479 traded companies, 211 advanced while 236 declined. Thirty-two stocks remained unchanged.

The Bank of Punjab led trading volumes with 50.3 million shares, closing at Rs13.60 with a rise of Rs0.05. Fauji Foods followed with 48.9 million shares, gaining Rs0.61 to close at Rs16.29, while Aisha Steel Mills saw 35.6 million shares change hands, rising Rs1.08 to end at Rs12.34.

Foreign investors sold shares worth Rs132.6 million, the National Clearing Company reported.