KARACHI: Just a day after experiencing its steepest plunge ever, the stock market on Wednesday staged an unprecedented rally, propelling the benchmark KSE-100 index to new highs as investors breathed a sigh of relief following the end of the PTI protest.
The benchmark index rose by 4,695.09 points, or 4.96 per cent, to close at 99,269.25 after hitting an intraday high of 99,549.81 points. This marks the largest single-day gain in the index’s history.
The KMI-30 index also gained 6,342.33 points to close at 144,783.05, while the KSE All-Share Index increased by 2,607.02 points, closing at 62,391.49.
Aqeel Karim Dhedhi, chairman of the AKD Group, attributed the surge to a combination of other factors as well, including robust economic indicators, the Israel-Hezbollah ceasefire, falling international oil prices, and the government’s efforts to resolve the circular debt crisis.
PSX sees largest single-day gain in its history, a day after suffering biggest fall
However, he stressed that political stability is a must to sustain the hard-earned economic stability. “Protest rallies every now and then do shake investor confidence, and the government must look for a durable peaceful solution to this issue by engaging the PTI leadership for the sake of Pakistan’s development,” Mr Dhedhi told Dawn.
He cautioned that political instability continues to deter foreign investors despite improving macroeconomic indicators. He also cited the failed privatisation of Pakistan International Airlines (PIA), which he attributed to the airline’s bloated workforce, as a key deterrent to potential buyers.
Historic gains across sectors
The KSE-100 index rally on Wednesday saw robust activity across major sectors, including fertiliser, banking, technology, energy, cement and pharmaceuticals. The Bank of Punjab, Hascol Petroleum, K-Electric, Fauji Foods and Bank Makramah were among the top contributors to trading volume.
Unilever Foods (Rs348.78), Rafhan Maize (Rs175.27), Hoechst Pakistan (Rs127.60), Abbott Laboratories (Rs74.64) and Service Industries (Rs70.69) recorded the highest increases in share prices.
Meanwhile, Pakistan Services (Rs50.29), Sapphire Textile (Rs26.35), Bela Automotives (Rs12.94), JDW Sugar Mills (Rs7) and Intermarket Securities (Rs6.72) experienced notable declines.
Despite the positive momentum, trading volume fell by 5.3pc to 1.05 billion shares, while the traded value declined by 8.62pc to Rs39.55bn. Foreign investors remained net sellers, offloading shares worth $6.75m.
Analysts optimistic
Ali Najib, sales head at Insight Securities, described the day as historic, followed by the Pakistan Stock Exchange’s “Black Tuesday”.
He predicted that the market’s bullish momentum could push the KSE-100 index past the 100,000-point psychological barrier on Thursday (today).
Ahsan Mehanti of Arif Habib Corporation noted that expectations of lower inflation for November and a stable rupee played a catalyst role in the bullish activity.
Topline Securities CEO Mohammed Sohail said the end of the opposition protest injected fresh optimism into the market, which gained more than Rs500bn in value in a single day.
“Euphoria was also led by interest in conventional banks after the State Bank eased the MDR rule,” he said, referring to the Minimum Deposit Rate requirement, a regulatory mechanism introduced by the SBP to ensure fair returns for depositors in conventional banks.
While the PSX’s performance reflects renewed investor confidence, economic challenges persist. During a recent informal assessment, the International Monetary Fund (IMF) raised concerns about revenue shortfalls, external financing gaps, delays in debt rollovers and the failure to privatise PIA.
Published in Dawn, November 28th, 2024
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