The Pakistan Stock Exchange (PSX) has hit a historic milestone, with the benchmark KSE-100 Index surging to an all-time high of 103,217.44 points during intra-day trading on Monday. The index gained 1,860.12 points (1.84%), building on last week’s momentum when it breached the unprecedented 100,000-point threshold.
Driving Factors Behind the Rally
The rally is fueled by strengthening economic fundamentals, sectoral growth, and renewed investor confidence. Market experts attribute the surge to macroeconomic stability, underpinned by policy reforms, an improved inflation outlook, and enhanced market liquidity.
“The positive momentum observed last week and earlier continues, driven by improving macroeconomic indicators,” noted Sana Tawfik, Head of Research at Arif Habib Limited. She added that inflation, expected to drop to 4.7%, could further strengthen market performance.
Boost from ADB Inflows and Sectoral Leadership
Investor optimism also received a boost from a $500 million inflow from the Asian Development Bank (ADB) under the Climate Change and Disaster Resilience Enhancement Program. This development pushed Pakistan’s foreign exchange reserves close to $12 billion, reducing economic uncertainty and bolstering confidence.
Sectoral performance played a significant role, with commercial banks contributing 1,675 points last week. The removal of the Minimum Deposit Rate (MDR) for corporate deposits further energized the banking sector, attracting substantial investor interest.
Other leading sectors included technology and communication, oil and gas exploration, and property, all of which recorded significant gains, showcasing broad market participation.
Analysts Forecast Continued Growth
Market analysts highlight the role of decisive government reforms and a favorable inflation outlook. Projections suggest inflation could drop to 5.6%-6.5% by December, raising expectations of further interest rate cuts by the State Bank of Pakistan (SBP).
“Consistent declines in yields and the shift from fixed income to equities are fueling the market,” said Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company.
Trading Volume and Investor Activity
The average daily traded value rose 7.1% week-on-week, reaching Rs 36.85 billion. While foreign investors pulled out $15.1 million, local insurance companies provided strong buying support, highlighting domestic confidence in the market.
Outlook Remains Positive
The KSE-100 Index’s rise follows a weekly surge of 3,559.09 points, driven by institutional support and investor enthusiasm. Despite political volatility, the market has showcased resilience, supported by a favorable regulatory environment.
Analysts remain optimistic about the market’s future, citing policy support, stable external accounts, and reduced business costs as key drivers for sustained growth.
As the PSX continues to break new ground, investor sentiment remains overwhelmingly positive, signaling a promising trajectory for Pakistan’s equity markets.