KARACHI: The Pakistan Stock Exchange (PSX) made a historic achievement on Thursday as the benchmark KSE-100 Index surpassed the 100,000 mark for the first time, marking a significant milestone after experiencing a sharp decline earlier in the week due to violent protests in Islamabad.

The index’s impressive rebound continued from the previous session, with investors driving the market upward.

The day began on a positive note with a 1% gain, supported by broad-based buying, as the index completed its remarkable climb from around 40,000 in June 2023. However, profit-taking led to a brief retreat around mid-morning, with the index dipping to approximately 99,600 by 11:20am, though it remained in the green zone.

Later in the session, buying activity picked up again, pushing the KSE-100 back above the 100,000 level by 2:20pm. By the close of the trading day, the index settled at 100,082.77, marking an increase of 813.52 points, or 0.82%.

This performance reflects a 60% increase year-to-date in 2024, and a staggering 141% rise since June 2023, according to Arif Habib Limited (AHL). Several factors contributed to this remarkable rise, including exchange rate stability, Pakistan’s transition from a $3 billion Stand-By Arrangement to a longer-term agreement with the International Monetary Fund (IMF), improved earnings from key sectors, and a general positive sentiment in the stock market following monetary easing.

Additionally, a quicker-than-expected decline in inflation and interest rates has injected liquidity into the stock market, according to Mohammed Sohail, CEO of Topline Securities.

Despite the rally, many analysts are questioning whether the momentum can continue. Some expect the KSE-100 to maintain its positive trajectory, with a potential 4-5% increase by the end of 2024, bringing the index to around 104,000-105,000. The decline in interest rates has made other assets less attractive, prompting investors to shift liquidity from mutual funds to equities in search of higher returns.

The PSX’s growth follows a major rebound on Wednesday, when the KSE-100 gained nearly 4,700 points, marking its largest single-day point increase ever and pushing the index above the 99,000 level for the first time. Meanwhile, global markets were subdued on Thursday, with Asian shares showing little movement, and the US dollar was under pressure due to stalled progress in slowing inflation despite a resilient economy in the United States.

In the currency market, the Pakistani rupee saw a slight decline, depreciating 0.03% against the US dollar to close at 278.04. Trading volume on the all-share index increased to 1.164 billion shares, with total market value rising to Rs39.78 billion. B.O. Punjab, K-Electric Ltd, and Bank Makramah were among the top stocks by volume. Of the 452 companies traded, 290 saw their shares increase, 118 recorded losses, and 44 remained unchanged.

Published in The Daily National Courier, November, 28 2024

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