Bulls return to PSX, benchmark index surges 499 points

On Thursday, the Pakistan Stock Exchange (PSX) closed with substantial gains, driven by positive sentiment following the U.S. presidential election outcome.

The KSE-100 Index rose by 499.04 points, or 0.54%, ending the session at 92,520.48. Throughout the day, the index fluctuated between a high of 92,694.53 and a low of 92,185.69, with a trading volume of 322.58 million shares valued at PKR 17.33 billion.

Key sectors, including automobile assemblers, commercial banks, oil and gas exploration companies, power generation, and refineries, saw buying activity. Index-heavy stocks such as PRL, HUBCO, SNGPL, OGDC, MCB, and MEBL traded in positive territory.

In a related development, Morgan Stanley Capital International (MSCI) Inc. announced the addition of eight Pakistani companies to its Frontier Market (FM) Small Cap Index  in its November review. 

The eight companies newly included in the MSCI FM Small Cap Index are Citi Pharma, Crescent Steel & Allied Products, Fast Cables, Flying Cement Company, Pakistan Oxygen, Shifa International Hospitals, Thatta Cement Company, and TRG Pakistan. 

Meanwhile, the IMF’s urgent mission is scheduled to visit Islamabad from November 11 to 15, to assess fiscal performance and discuss potential corrective measures, including the introduction of a mini-budget.

On Wednesday, the PSX slipped into the red zone shortly after the victory of the Republican candidate for the White House Donald Trump as investors around the world were closely watching for clues on who will lead the world’s largest economy for the next four years.  The KSE-100 shed 282.88 points to close at 92,021.44 points. 

The PSX has been on a winning streak for some weeks mainly supported by increased investor confidence and improved economic indicators. This bullish momentum was further ignited by a 250 basis points (bps) rate cut by the central bank on Monday. 

The SBP reduced the key policy rate from 17.5% to 15%, surprising many economists as they were expecting the SBP to cut the policy rate by 200 basis points This was the fourth consecutive reduction since June 2024.

Last week, the PSX rose by 0.96% week-over-week, supported by continued monetary easing and the country’s first quarterly budget surplus in over 20 years, amounting to Rs 1.7 trillion in the first quarter of FY25, along with strong corporate earnings reports.

The government, however, missed two of the IMF’s quarterly targets: tax collection fell short by Rs 90 billion, and the provinces’ cash surplus target by Rs 182 billion. 

October’s headline inflation reached 7.2% year-over-year, while real interest rates remained comfortably above 10% at current policy rates. 

On the macroeconomic side, the trade deficit for October was $1.4 billion, with exports for the month rising 4.9% month-over-month to $2.97 billion.

Globally, Asia-Pacific equity markets traded higher on Thursday, buoyed by a record rise for US shares overnight, as investors mulled the implications of a Donald Trump presidency, while also eyeing policy decisions from the US Federal Reserve and other major central banks later in the day.

U.S. stock futures pointed higher after all three major Wall Street indexes surged to all-time peaks on Wednesday on the possibility for a Republican sweep that could quickly usher in big fiscal spending.