PSX benchmark index surges over 1,300 points post-Eid

The Pakistan Stock Exchange (PSX) experienced a remarkable surge on Thursday, with the benchmark KSE-100 index reaching an all-time high. In intraday trading, the index climbed 1,366.93 points, or 1.78 per cent, to settle at 78,073.70 points, surpassing the previous close of 76,706.77 points at 10:45 AM.

This bullish momentum is attributed to a combination of positive economic indicators and favourable assessments by rating agencies. Mohammed Sohail, Chief Executive of Topline Securities, noted that investor confidence has been buoyed by the anticipation that the new budget will secure a long-term deal with the International Monetary Fund (IMF). “Positive sentiments continue amid hope that the new budget will help secure a long-term IMF deal,” Sohail said.

Raza Jafri, Chief Executive of EFG Hermes Pakistan, emphasised the impact of recent developments over the Eid holidays. “The market is pricing in the favourable news over the Eid holidays, including Fitch’s dovish view on the inflation outlook and the proposed reduction in electricity tariffs for industries,” Jafri stated. He also pointed out that the recent phase of modest foreign selling pressure, likely linked to the FTSE rebalancing, appears to be easing.

Yousuf M. Farooq, Director of Research at Chase Securities, highlighted several factors contributing to the market’s upward trajectory. These include declining fixed income yields, the absence of new capital gains and dividend taxes in the budget, the rationalisation of energy tariffs, improving economic sentiment, and reduced uncertainty over the balance of payments situation. “Comments from Fitch and Moody’s have all contributed to today’s market rally,” Farooq added.

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