PSX defies political unrest, KSE-100 surges over 600 points in intraday trade

The Pakistan Stock Exchange (PSX) demonstrated resilience amid ongoing political unrest in the country, with the benchmark KSE-100 Index briefly surpassing the historic 99,000 mark during intraday trading on Monday.

According to the PSX website, the market opened on a bearish note and the benchmark index plunged to 97,137.63 points. However, the market recovered as buying returned in major sectors and the KSE-100 touched the highest level of 99,317.47 points, up by  1519.24 points from the previous close of  97,798.23 points. 

Buying activity was observed in sectors such as commercial banks, oil & gas marketing companies, and refineries.  

At 02:15 pm, the KSE-100 Index was hovering at 98,403.23 level, with an increase of 605.00 points or 0.62%. 

Market analysts attributed the market rally to unconfirmed speculation that the State Bank of Pakistan (SBP) might ease the minimum deposit rate (MDR) requirements. 

The PSX has been on a winning streak for some weeks mainly supported by increased investor confidence and improved economic indicators. It concluded the last week on a strong note, with the KSE-100 index closing at an all-time high of 97,798 points, with a 3.2% or 3,035 points increase WoW.

According to AKD Securities, the market’s bullish momentum was driven by robust performances in the banking and fertilizer sectors, which collectively added 2,839 points to the index.

The Fertilizer sector benefited from the ongoing amalgamation of Fauji Fertilizer Company (FFC) and Fauji Fertilizer Bin Qasim Limited (FFBL), with FFC emerging as the week’s top performer.

Banks saw increased lending activity, pushing the Advance-to-Deposit Ratio (ADR) to 44% as of October 25, 2024, up from 39% the prior week. This increase aligns with banks’ efforts to avoid higher ADR-based taxation, as the government has appealed against the Islamabad High Court’s stay order on the tax.

AKD Securities projected that the market to maintain a positive trajectory, supported by ongoing monetary easing, a disinflationary environment, and improving macroeconomic fundamentals.