A strong macroeconomic outlook propelled the Pakistan Stock Exchange (PSX) to climb over 2,000 points on Friday, continuing its record-breaking run.
The benchmark KSE-100 index of the PSX surged 2,294.64 points, or 2.36%, from the previous close of 97,328.39 points to hit 99,623.03 during intraday trading.
The market is seeing consistent upward momentum, according to Tahir Abbas, Head of Research at Arif Habib Limited, who spoke to local media.
“The economic indicators, the improvement of macros, and the projection that the rate of inflation will be around 4.5% for the month are the main reasons for this,” he stated.
It is anticipated that interest rates would be further lowered the following month, Abbas continued.
“Aside from that, regional liquidity is very robust,” the analyst added, highlighting the crucial role that liquidity plays in propelling the market’s growth. The market is constantly receiving money from a variety of investors.
Market analysts cite rising foreign exchange reserves, improving current account statistics, and privatization as growth drivers, while increased liquidity among mutual funds, banks, and insurance firms has further driven the surge.
In important industries including auto manufacturers, commercial banks, fertilizers, oil and gas exploration firms, and power producers, there was widespread purchasing.
The State Bank of Pakistan (SBP), which holds Pakistan’s foreign exchange reserves, saw a $29 million rise, reaching a 31-month high of $11.29 billion.
The whole amount of liquid foreign reserves was $15.97 billion. The interbank market saw the Pakistani rupee close at Rs277.96/$ on Friday, up 0.11%.
The decline in inflation to levels not seen since 2022 boosts market optimism. The PSX is growing strongly because investors are shifting from fixed-income instruments to stocks due to expectations of an interest rate drop next month.
Analysts feel that PSX values remain cheap, indicating more space for development, notwithstanding the steady upward track.
