All-time high: 1,700-point surge takes PSX past 88,000 on hopes of rate cut

Published October 24, 2024
Bullish momentum witnessed at the Pakistan Stock Exchange (PSX) on Thursday — PSX data portal
Bullish momentum witnessed at the Pakistan Stock Exchange (PSX) on Thursday — PSX data portal

Bulls continued their stampede on the trade floor at the Pakistan Stock Exchange (PSX) on Thursday as shares breached the 88,000 milestone.

The benchmark KSE-100 index initially gained 851.11 points, or 0.98 per cent, to stand at 88,045.64 points from the previous close of 87,194.53 points at 10:56am. By 1:17pm, it rose further, cumulatively gaining 1.36pc, or 1,189.31 points. Finally, it closed at 88,945.98 points, up by 1751.45 points or 2.01pc, from the previous close.

Mohammed Sohail, chief executive of Topline Securities, attributed the bull run to locals buying aggressively on falling bond yields amid expectations of a major cut in monetary policy rate in November.

Most analysts believe the State Bank of Pakistan (SBP) will reduce its policy rate by 200 basis points in its upcoming meeting on November 4, marking the fourth consecutive cut since June, thanks to a decline in inflation, a low current account deficit and higher remittances.

“Pakistan market saw another high led by aggressive institutional buying amid hope of big rate cuts in November and December monetary policy meetings,” he said.

He noted that a “record volume” of Rs53 billion ($190 million) was traded at the stock exchange in the cash and futures market which signalled improving confidence of investors.

Yousuf M. Farooq, director research at Chase Securities, said, “We are in a bull market and market participation is increasing.”

He noted that “volumes for the ready and futures counters combined” have been above Rs40 billion for the previous two days.

“Fund conversions have started to flow towards equities and we expect this to continue,” he added.

Awais Ashraf, director research at AKD Securities, noted, “With political risks easing and the approval of a $3 billion loan facility from the Islamic Trade Financing Corporation [ITFC], investor sentiment has turned bullish on equities.”

In a post on X, the finance ministry confirmed that Finance Minister Muhammed Aurangzeb held a meeting with the delegation of ITFC in Washington, appreciating its support for commodity financing of $3 billion over the next three years.

Ashraf highlighted that investors also anticipated “further aggressive monetary easing in the upcoming policy announcement”, as real interest rates remained above 10pc — despite a total of 4.5pc key policy rate cuts since June this year.

“Stocks that stand to benefit from monetary easing and ongoing structural reforms are expected to outperform others,” he added.

Currently, the stock market’s average traded volume increased by 73.36pc on a year-on-year basis.

Yesterday, shares had rallied on the back of expectations of an upcoming rate cut in the monetary policy announcement set for November 4.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

From hard to harder

From hard to harder

Instead of ‘hard state’ turning even harder, citizens deserve a state that goes soft on them in delivering democratic and development aspirations.

Editorial

Canal unrest
Updated 03 Apr, 2025

Canal unrest

With rising water scarcity in Indus system, it is crucial to move towards a consensus-driven policymaking process.
Iran-US tension
03 Apr, 2025

Iran-US tension

THE Trump administration’s threats aimed at Iran do not bode well for global peace, and unless Washington changes...
Flights to history
03 Apr, 2025

Flights to history

MOHENJODARO could have been the forgotten gold we desperately need. Instead, this 5,000-year-old well of antiquity ...
Eid amidst crises
Updated 31 Mar, 2025

Eid amidst crises

Until the Muslim world takes practical steps to end these atrocities, these besieged populations will see no joy.
Women’s rights
Updated 01 Apr, 2025

Women’s rights

Such judgements, and others directly impacting women’s rights should be given more airtime in media.
Not helping
Updated 02 Apr, 2025

Not helping

If it's committed to peace in Balochistan, the state must draw a line between militancy and legitimate protest.