Bullish sentiment dominated the Pakistan Stock Exchange (PSX) on Monday as the KSE-100 index climbed 621.85 points, or 0.64 per cent, to reach 98,420.08 at 12:45 PM, up from the previous close of 97,798.23.
Market analysts attributed the surge to unconfirmed speculation surrounding regulatory changes. Mohammed Sohail, Chief Executive of Topline Securities, said, “The market is rallying on speculation that the State Bank of Pakistan (SBP) may provide relaxation to banks on minimum deposit rates (MDR) for savers.”
The banking sector emerged as the key driver of the rally. Yousuf M. Farooq, Director of Research at Chase Securities, pointed out, “A rally in banking stocks, driven by rumours of the removal of advance-to-deposit ratio (ADR) tax and changes in MDR, has led to strong market performance today, even as investors remain cautious in other sectors.”
Bank Al Habib, Meezan Bank, Bank Alfalah, and MCB spearheaded the surge, fuelled by consistent fund inflows. Farooq elaborated, “Individuals and institutions are shifting from fixed-income investments to equities amid declining yields.” He advised retail investors to maintain a disciplined, long-term strategy, emphasising the importance of diversification and liquidity planning.
Awais Ashraf, Director of Research at AKD Securities, echoed similar sentiments, highlighting the role of institutional inflows in sustaining the market’s upward trajectory. “Declining fixed-income yields have offset the negative impact of political uncertainty,” he explained. “Commercial banks expected to be exempt from ADR taxation have further buoyed today’s performance.”
Despite ongoing political challenges, the market has shown resilience, with the banking sector continuing to attract investor confidence.