KARACHI — Positive investor sentiment early in the day at the Pakistan Stock Exchange (PSX), driven by Moody’s upgrade of Pakistan’s sovereign credit rating, lost momentum by the close, with the benchmark KSE-100 Index finishing slightly lower at 146,491.63 points, down 37.67 points (-0.03%).
During the morning session, the index had surged towards the 147,000 mark, rising to 146,967.93 points at midday, reflecting a gain of 438.63 points (0.30%). Buying activity was observed in key sectors, including automobile assemblers, commercial banks, fertilizers, oil and gas exploration companies, OMCs, and refineries. Heavyweight stocks such as ARL, NRL, OGDC, POL, PPL, PSO, MCB, MEBL, and NBP traded in positive territory.
Analysts attributed the morning rally to Moody’s upgrade on Wednesday, which lifted Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa1 from Caa2, while the senior unsecured MTN programme rating was revised to (P)Caa1 from (P)Caa2, and the outlook for the government of Pakistan was changed to stable from positive.
Leading business organisations, including FPCCI, the Businessmen Forum, and NKATI, welcomed the rating improvement, calling it a positive development for Pakistan’s economic future. Market observers also cited expectations of the third $1 billion tranche from the IMF, pending completion of the next review during the scheduled delegation visit at the end of September.
The State Bank of Pakistan, in its first-ever biannual Monetary Policy Report, noted that domestic economic stability has improved the country’s ability to manage external shocks and domestic risks compared to two years ago. Foreign investment inflows are expected to rise following the credit rating upgrade, coupled with reduced credit default swap spreads.
“All these factors, combined with fresh liquidity moving from the debt market into equities, have contributed to the recent momentum,” Waqas Ghani, Head of Research, told Business Recorder.
However, selling pressure resurfaced in the afternoon as investors booked profits following the midweek rally. Concerns over a widening trade deficit and pending IMF conditions for provincial tax collection added to caution. On Wednesday, the market had already seen mild profit-taking, with the KSE-100 Index closing at 146,529.31 points, down 476.02 points (0.32%).
The PSX remained closed on Thursday, August 14, in observance of a public holiday.
