The Pakistan Stock Exchange (PSX) on Monday breached the 156,000-point barrier amid continued investor optimism on the back of improving macroeconomic indicators.
The KSE-100 index climbed by 1,810.11 points to close at 156,087.30, up by 1.17 per cent from the previous close of 154,277.19.
The PSX has witnessed a bullish trend in recent days, despite concerns over risks to the economy due to the ongoing floods, with the Pakistan Business Forum estimating the losses to crops worth billions of rupees.
Awais Ashraf, research director at AKD Securities, told Dawn.com: “Investors remain optimistic on improving macroeconomic indicators and stronger-than-expected corporate results, which have outweighed concerns over the recent floods.“
He said the market was expected to remain positive in the coming weeks, with the upcoming Monetary Policy Committee meeting and any developments over circular debt remaining in the limelight.
“The KSE-100 is anticipated to sustain its upward trajectory, with a target of 165,215 points by December 25, primarily driven by strong earnings in fertilisers, sustained return on equity in banks and improving cash flows of exploration and production and oil marketing companies, benefiting from falling interest rates and economic stability.”
Meanwhile, Yousuf M. Farooq, research director at Chase Securities, noted that the stock market was being powered by abundant domestic liquidity, individuals and funds steadily deploying cash, placing the market in the “optimism phase” of the cycle.
“Confidence in forward earnings is improving, lower interest rates are pushing savers out of fixed income into equities and early movement on circular-debt resolution has supported a re-rating.”
He said the monetary policy was still tight in real terms so additional cuts could extend the runway. “The risks aren’t invisible — market leverage is rising and flood damage could weigh on growth — but this is a market to participate in with discipline: stagger entries, size positions prudently and let improving earnings — not euphoria — do the heavy lifting,” he added.
