KSE-100 Index Surges in Spectacular 500-Point Rally, Breaches 49,000 Mark After Four Years

On Thursday, the Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index broke through the 49,000 barrier, marking a significant milestone not seen in the past six years. The index soared by an impressive 578.13 points from its previous close of 48,764.55 points, reaching 49,342.68 points by 11:40 am.

Arif Habib Corporation reported that this was the first time in six years that the stock market had achieved this feat, with the last occurrence recorded on June 9, 2017. Notably, the stock market has witnessed a remarkable upswing, gaining 7,686 points, or 18.5 per cent, since Pakistan entered into a standby agreement with the International Monetary Fund (IMF).

Ahsan Mehanti from Arif Habib Corporation attributed the bullish sentiment among investors to several factors. These included easing inflation to 28.3 per cent in the first month of the current fiscal year and the State Bank of Pakistan’s decision to maintain an unchanged policy rate. Additionally, positive economic indicators, such as an improved $1.6 billion trade deficit data for July 2020 and the government’s plans to address the gas circular debt crisis, along with higher foreign exchange reserves, acted as catalysts for the market’s surge.

Raza Jafri, the head of equity at Intermarket Securities, noted that the KSE-100 index continued its rally beyond the 49,000 milestone, with significant interest in the banking and oil and gas exploration sectors. Furthermore, the announcement of a sponsor’s intention to increase shareholding in Habib Bank Ltd was perceived positively by the market. The expectation of energy reforms also fueled an upward trajectory in the oil sector.