The Pakistan Stock Exchange (PSX) witnessed a strong rally on Monday as the market welcomed the formation of a new government led by Shehbaz Sharif, who won the prime ministerial election on Sunday.
According to data available on the PSX website, the stock market opened with an upward trend and gained over 600 points in the early hours of trading which helped the KSE-100 Index to surpass the psychological barrier of 66,000 points for a brief period.
The benchmark index closed at 65,951.72 level, with an increase of 626.04 points or 0.96%.
The market was buoyed by the heavy buying in index-weighted shares such as OGDC, Engro, PPL, and SNGP, which were among the top performers. Analysts said the market sentiment improved as the political uncertainty in the country subsided.
The investors were also optimistic about the economic outlook of the country, as the headline inflation rate for February came lower than expected, signaling a possible start of the monetary easing cycle by the State Bank of Pakistan (SBP).
“The market is expected to remain positive on expectations that the newly elected government would negotiate successfully with the IMF for the final tranche of around $1 billion and commence talks for another loan program. On the economic front, the CPI for February rose by 23.06% YoY against consensus expectations of 23.65% while the trade deficit narrowed by 13.49% YoY to $1.7 billion in February,” Intermarket Securities said.
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