The Pakistan Stock Exchange (PSX) experienced a historic moment as the benchmark KSE-100 index surpassed the 69,000 level for the first time ever, marking a significant milestone in the country’s financial landscape. This surge in the market was fueled by several key factors, contributing to the bullish momentum observed during trading.
One of the primary drivers behind this remarkable performance was the strong performance of the energy sector, particularly notable due to the presence of index-heavy companies like OGDC, PPL, PSO, SSGC, and SNGPL trading positively. This sector’s strength likely stemmed from increased investor confidence in the stability and growth potential of energy-related stocks, driven by favorable market conditions and promising outlooks for the sector’s profitability.
Moreover, the decrease in inflation numbers played a crucial role in bolstering investor sentiment. With inflation figures registering at 20.68% YoY for March 2024, the reduction in inflationary pressures signaled positive implications for the economy, particularly in terms of real interest rates turning positive for the first time in 38 months. This development raised expectations for a potential policy rate cut by the central bank, which further contributed to the market’s optimism.
Additionally, the injection of liquidity by foreign investors and institutions through buying activity provided substantial support to the market’s upward trajectory. This influx of external funds underscored the confidence of international investors in Pakistan’s market potential and economic prospects, reinforcing the bullish sentiment prevailing in the PSX.
Furthermore, the anticipation of significant bilateral agreements during Prime Minister Shehbaz Sharif’s visit to Saudi Arabia and Finance Minister’s plans to negotiate for a new IMF/WB program in Washington added to the positive market sentiment. These diplomatic and financial engagements signaled the government’s commitment to addressing economic challenges and fostering long-term sustainability, which resonated positively with investors and contributed to the overall bullish outlook of the market.
