Driven by institutional buying and expectations of a further rate cut, the Pakistan Stock Exchange (PSX) staged a strong comeback, with the benchmark KSE-100 Index gaining over 1,450 points on Thursday.
Buying was witnessed throughout the trading session, pushing the benchmark index to an intra-day high of 113,871.21.
At close, the benchmark index settled at 113,713.17, amid a gain of 1,459.41 points or 1.30%.
Buying was observed in key sectors including automobile assemblers, cement, commercial banks, fertilizer, oil and gas exploration companies, OMCs and refinery. Index-heavy stocks including PRL, HUBCO, PSO, SNGPL, MARI, OGDC, HBL, NBP and UBL traded in the green.
Talking to Business Recorder, Sana Tawfik, Head of Research at Arif Habib Limited (AHL), said that institutional buying is driving the market amid expectations of a policy rate cut by the central bank in the upcoming Monetary Policy Committee (MPC) meeting.
“Moreover, the decline in international oil prices is also driving the upward trend,” she said,
Investors are keenly watching ongoing talks between the Pakistani authorities and the International Monetary Fund (IMF) regarding the first review of its $7 billion Extended Fund Facility (EFF) programme.
The review, if cleared and approved by the lender’s board, could unlock another tranche of funding for cash-strapped Pakistan ahead of its annual budget, which is usually presented in June.
Meanwhile, sources told Business Recorder that the government has called on banking heads to resolve the circular debt issue, which is driving the market’s upward momentum.
On Wednesday, the PSX benchmark KSE-100 closed lower by 490 points after selling in the second half erased the intra-day gains of nearly 600 points.
Internationally, Asian stocks rose on Thursday as investors held out hope that trade tensions could ease after US President Donald Trump exempted automakers from tariffs for a month, while the euro stood tall ahead of the European Central Bank policy meeting.
Japanese government bonds fell sharply in Asian hours after German long-dated bonds were swept up in their biggest sell-off in years as the parties in talks to form Germany’s new government agreed to try to loosen fiscal rules.
Japan’s 10-year government bond yield hit a near 16-year high as sentiment remained fragile.
Much of the market focus remains on an escalating global trade war after 25% tariffs on imports from Mexico and Canada were imposed on Tuesday along with fresh duties on Chinese goods, sparking fears about economic growth.
But on Wednesday, the White House said Trump will exempt automakers from his 25% tariffs on Canada and Mexico for one month as long as they comply with existing free trade rules.
That led US stocks sharply higher, shoring up Asian markets in early trade. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.86%, while Tokyo’s Nikkei gained 0.8%.
China and Hong Kong shares rose on Thursday, a day after Beijing set an ambitious economic growth target and vowed more support for domestic consumption and the tech industry as a trade war with the United States ratchets up.
China’s blue-chip index rose 0.6% while Hong Kong’s Hang Seng Index, the best-performing major stock market in the world, surged 2.4%.
Hang Seng is up 20% so far this year and touched its highest level since January 2022.
Meanwhile, the Pakistani rupee recorded marginal improvement against the US dollar, appreciating 0.02% in the inter-bank market on Thursday. At close, the rupee settled at 279.82, a gain of Re0.05 against the greenback.
Volume on the all-share index increased to 373.09 million from 263.96 million recorded in the previous close.
The value of shares rose to Rs26.25 billion from Rs13.73 billion in the previous session.
Pak Int.Bulk was the volume leader with 48.31 million shares, followed by Fauji Cement with 28.19 million shares, and WorldCall Telecom with 22.58 million shares.
Shares of 441 companies were traded on Thursday, of which 220 registered an increase, 142 recorded a fall, while 79 remained unchanged.
