ISLAMABAD: The Pakistan Stock Exchange (PSX) continued its bullish trend on Tuesday with the benchmark KSE-100 index surging by 665.81 points or 0.78 percent to reach an all-time high 85,576.10 points, with analysts attributing the impressive surge to market speculation about a cut in the policy rate and strong earnings of oil companies.
The PSX witnessed an impressive rally on Monday with the KSE-100 index surging to just under 85,000 points, which analysts said was fueled by strong performances in blue-chip oil stocks and overall optimism regarding the economy.
Pakistan’s economic indicators have improved after the South Asian country secured a $7 billion, 37-month bailout package from the International Monetary Fund (IMF) last month. Pakistan’s central bank also cut its key policy rate by 200 basis points to 17.5 percent in September, making it the third straight reduction since June.
“Higher global crude oil prices, falling banking lending rates and the government’s deliberation on the privatization of state-owned entities played a catalyst role in the bullish activity in the PSX,” Ahsan Mehnati, the managing director and chief executive officer Arif Habib Commodities, told Arab News.
Stock market information app Investify Pakistan also attributed the bullish trend to “strong investor interest and significant contributions from blue-chip oil stocks.”
“The market, which experienced an initial dip, gained momentum due to factors such as rising global crude oil prices, anticipation of strong earnings from oil companies, and a recent successful settlement between Pakistan Petroleum Limited and Iraq’s Midland Oil Company,” Investify Pakistan said on social media platform X.
Topline Securities, a leading brokerage house in Pakistan, had attributed the bullish trend in the stock market to “falling bond yields and an expected sharp drop in inflation, igniting a wave of optimism in the market.”
The South Asian country last year narrowly avoided a sovereign default when it clinched a $3 billion IMF loan program. Pakistan has suffered a prolonged economic crisis that drained its foreign exchange reserves last year and saw its currency weaken significantly amid double-digit inflation.
