The Pakistan Stock Exchange (PSX) saw a rollercoaster week, with the KSE-100 index gaining 1,147 points. Improved liquidity, low inflation, and IMF optimism drove the market, despite midweek volatility. Read the full review here.
The Pakistan Stock Exchange (PSX) wrapped up the week positively, with the benchmark KSE-100 index gaining 1,147 points (1.01%) to close at 114,399 points. The week was marked by dramatic swings, driven by improved domestic liquidity, market optimism, and key economic developments. Here’s a day-by-day breakdown of how the week unfolded:
Monday: A Rocky Start
The week started with heavy selling pressure, as the KSE-100 index plunged to an intraday low of 111,829 points. By the end of the trading session, the index had lost 1,265 points, closing at 111,987. Investors appeared cautious amid uncertainty, setting a somber tone for the week.
Tuesday: A Strong Comeback
Tuesday brought a wave of optimism as the market staged a strong recovery. The KSE-100 index surged by 757 points, driven by two key factors:
- Low Inflation: February’s inflation rate of 1.5%—the lowest in a decade—boosted investor confidence.
- Sectoral Optimism: Expectations of strong earnings from major companies in the banking, fertilizer, and oil sectors fueled buying activity.
The rebound was a welcome relief after Monday’s steep decline, signaling renewed investor interest.
Wednesday: A Midweek Reversal
The market’s upward momentum faced a setback on Wednesday. Despite early gains of over 600 points, selling pressure emerged later in the session, erasing most of the progress. The KSE-100 index closed with a loss of 490 points, reflecting the volatile nature of the week.
Thursday: A Day of Confidence
Thursday was the highlight of the week, as the KSE-100 index skyrocketed by 1,459 points. This impressive rally was fueled by:
- Investor Confidence: Improved domestic liquidity and optimism about the economy played a key role.
- IMF Talks: Discussions around the International Monetary Fund’s (IMF) visit for the first review of the $7 billion Extended Fund Facility (EFF) added to the positive sentiment.
The day’s performance was a clear indicator of regained investor trust and market stability.
Friday: Ending on a High
The week concluded with another strong showing, as the KSE-100 index climbed 686 points. Investors were buoyed by the expectation of a potential interest rate cut by the State Bank of Pakistan (SBP) following the low inflation reading. The market’s upward trajectory was further supported by sectoral gains and favorable economic indicators.
Weekly Highlights and Key Contributors
According to Arif Habib Limited’s (AHL) weekly assessment, the PSX’s positive performance was driven by:
- Sectoral Contributions:
- Exploration and Production (E&P): 656 points
- Cement: 451 points
- Oil Marketing Companies (OMCs): 346 points
- Power: 177 points
- Glass: 114 points
- Top Performing Stocks:
- Pakistan Petroleum (290 points)
- PSO (247 points)
- OGDC (236 points)
- Hubco (185 points)
- Fauji Cement (156 points)
- Challenging Sectors:
- Commercial Banks: -48 points
- Technology and Communication: -122 points
- Textiles: -97 points
- Automobiles: -89 points
IMF’s Role in Market Optimism
A key factor behind the week’s positive sentiment was the IMF’s visit to Pakistan for the first review of the $7 billion EFF. The discussions around the IMF program and its potential impact on the economy played a significant role in boosting investor confidence.
Conclusion: A Week of Ups and Downs
The PSX’s week was a rollercoaster ride, with significant losses and gains. However, the market ultimately closed higher, thanks to improved domestic liquidity, low inflation, and optimism surrounding the IMF review. As investors look ahead, all eyes will be on the SBP’s upcoming policy rate decision and further developments in the IMF talks.
For now, the PSX remains a dynamic and promising arena for investors, reflecting the resilience and potential of Pakistan’s economy.