The Pakistan Stock Exchange (PSX) achieved a historic milestone as the benchmark KSE-100 index breached the 59,000-point barrier, closing at 59,086.35 points, marking a 0.32% gain. This unprecedented surge, attributed to a positive economic outlook, reflects investor confidence in the government’s economic policies and the well-managed risks.
Raza Jafri, Head of Equities at Intermarket Securities, emphasized the government’s focus on the economy as a driving force behind the market’s continuous upward trajectory. Despite the rally, valuations remain attractive, with foreign buying contributing significantly to the market’s positive momentum.
Saad Ali, a capital market expert, highlighted key factors driving the rally, including interest rate cuts, low political risks ahead of elections, and the smooth continuation of the International Monetary Fund’s Stand-by Arrangement. The market’s resilience stems from optimism surrounding economic revival, a shrinking current account deficit, and efforts to resolve power sector circular debt.
Analysts predict a potential interest rate cut in early 2024, adding to the positive sentiment. The surge in exports, rupee recovery, and IMF disbursement further contributed to the record-breaking close, positioning the PSX as Asia’s best-performing index.
The bullish run is expected to continue, with projections indicating a potential benchmark of 75,000 points by December 2024. Sunny Kumar, Deputy Head of Research at Topline Securities, pointed out that clarity on elections and a successful IMF review have provided investors with direction.
The rally is not confined to specific sectors, as technology, power, and banking stocks lead the way. However, caution is advised, considering potential challenges in foreign debt repayment and an increase in the current account deficit. The market’s future trajectory will be closely linked to developments in oil prices, with analysts closely monitoring support levels to gauge potential corrective trends.