The Pakistan Stock Exchange (PSX) witnessed a strong upward momentum on Monday, with the KSE-100 Index gaining over 1,000 points during the intraday trading.
According to the PSX website, the benchmark index settled at 91,938.00 points, up by 1078.15 points or 1.19% from the previous close of 90,859.85 points on Friday.
Major sectors including oil and gas exploration, automobile assemblers, cement, chemicals, commercial banks, fertilizers, and oil marketing companies observed widespread buying activity. Key stocks, such as OGDC, PPL, SNGP, SSGC, and HCAR, were trading positively, contributing to the index’s rise.
The upward rally was mainly fueled by investors’ expectations of a possible rate cut by the State Bank of Pakistan (SBP), positive corporate earnings and improved economic indicators.
The SBP reduced the key policy rate by 250 basis points from 17.5% to 15%. Many economists were expecting the SBP to cut policy rate by 200 basis points. This is the fourth consecutive reduction since June.
Last week, the KSE-100 index gained 0.96% week-over-week (WoW). The positive rally was fueled by an anticipated continuation of monetary easing and the country reporting its first-ever quarterly budget surplus in over 20 years of Rs1.7 trillion during the first quarter of the FY25, coupled with strong corporate results.
However, the government missed two of the IMF’s quarterly targets: one for tax collection, marking a shortfall of Rs 90 billion, and another for cash surplus for the provinces, marking a shortfall of Rs 182 billion.
The headline inflation for October clocked in at 7.2% YoY, with real interest rates comfortably above 10% at current policy rate levels.
On the macro front, the trade deficit for October clocked in at $1.4 billion, with exports for the month standing in at $2.97 billion, up 4.9% MoM.
Globally, financial markets began the week on a cautious note on Monday, with shares in Asia subdued while the dollar eased slightly ahead of a busy week headlined by the US presidential race which is set to come down to the wire.
The week will also provide investors with global monetary policy catalysts with rate decisions from the Federal Reserve, the Bank of England (BoE), the Reserve Bank of Australia (RBA), Riksbank and Norges Bank.
Trading was thinned in Asia on Monday with Japan out for a holiday, but MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7%, recovering from its fall to a five-week low on Friday.
US stock futures though lost ground, with Nasdaq futures falling 0.11%, while S&P 500 futures eased 0.14%.
Chinese stocks got off to a positive start on Monday, with the CSI300 blue-chip index gaining 0.2%, while the Shanghai Composite Index ticked up 0.04%. Hong Kong’s Hang Seng Index rose 0.4%.
