In a remarkable comeback for Pakistan’s stock market, the benchmark KSE-100 Index surged by more than 1,450 points on Thursday, reflecting strong institutional buying and growing expectations of a potential interest rate cut. The rise marked a significant turnaround after a period of market volatility, boosting investor confidence.
Throughout the trading session, the market experienced consistent buying activity, which propelled the KSE-100 Index to an intra-day high of 113,871.21 points. At the close of the day’s trading, the index settled at 113,713.17, marking a gain of 1,459.41 points or 1.30%. This sharp uptick is seen as a positive signal for market participants, particularly after a challenging period for the Pakistani economy.
The surge was primarily driven by increased buying in key sectors, including automobile assemblers, cement, commercial banks, fertilizers, oil and gas exploration companies, and oil marketing companies (OMCs). Major index-heavy stocks such as PRL, HUBCO, PSO, SNGPL, MARI, OGDC, HBL, NBP, and UBL also recorded positive movements, contributing to the overall market rally.
Sana Tawfik, Head of Research at Arif Habib Limited (AHL), explained that the current surge in the stock market is being driven by institutional buying, as investors anticipate a policy rate cut by the central bank in the upcoming Monetary Policy Committee (MPC) meeting. “Moreover, the recent decline in international oil prices has provided additional momentum to the upward trend,” she noted.
One of the key factors influencing investor sentiment is the ongoing dialogue between Pakistani authorities and the International Monetary Fund (IMF). The discussions revolve around the first review of Pakistan’s $7 billion Extended Fund Facility (EFF). If the review is successfully cleared and approved by the IMF’s board, it could unlock another tranche of funding for Pakistan, providing crucial support ahead of the country’s annual budget, which is usually presented in June.
In addition to this, market sources shared that the government has taken steps to address the country’s circular debt issue, which has been one of the persistent challenges impacting the economy. This initiative is expected to contribute positively to the market’s upward momentum.
The performance of the Pakistan Stock Exchange also mirrored trends in global markets. On Thursday, Asian stocks saw a rise as investor sentiment improved, partly due to the U.S. decision to exempt automakers from tariffs for one month. This move alleviated some concerns about the escalating global trade tensions, with the MSCI Asia-Pacific Index rising by 0.86%, and Japan’s Nikkei 225 gaining 0.8%. Additionally, China’s blue-chip index rose by 0.6%, and Hong Kong’s Hang Seng Index surged by 2.4%, maintaining its position as the best-performing major stock market globally.
The optimism surrounding the KSE-100 Index’s rally was supported by these global movements, which reflected easing trade concerns and positive economic signals from major economies. While international markets face uncertainties due to global trade tensions, the PSX’s strong performance on Thursday showcased the resilience of the Pakistani market, driven by strategic moves and expectations of future economic stability.
As investors continue to monitor the developments between Pakistan and the IMF, along with other key economic indicators, the outlook for the stock market remains cautiously optimistic. The KSE-100 Index’s surge is seen as a sign of renewed confidence, fueled by favorable policies and an improving global economic landscape.