As it moves towards recovery, PSX surges beyond the 120,000 level.
Following the unprecedented surge the day before, the Pakistan Stock Exchange (PSX) continued its upward trajectory on Tuesday.
Following the clearing of war clouds and the recent approval of $1 million by the International Monetary Fund (IMF) under the Extended Fund Facility, investors have regained confidence.
The KSE-100 index gained 2,000 points in the early hours of trade on Tuesday, as it flew beyond the 120,000 mark (120,067 to be exact).
ANOTHER DAWN
Monday, the opening day of the week, saw the PSX gain momentum following an agreement between India and Pakistan on a ceasefire. Another boost came from the approval of the IMF loan tranche.
During the opening session on the first day of the week, the stock market initially climbed to 117,104.11 points – a gain of staggering 9,928 points – as investors seemed confident following the positive developments on political and economic fronts.
The KSE-100 index thereafter had a positive shift of 8.84 percent, from 9,475.49 points to 116,650.12 points, necessitating an hour-long market halt.
Resumption of trading further improved the situation and the index eventually closed at 117,297 after spike of 10,123 points.
Experts credited the historic increase to a potent confluence of favourable events, with the ceasefire agreement between India and Pakistan serving as the most important catalyst.
The announcement of the ceasefire came after weeks of tension following the Pahalgam attack, which had triggered aggressive selloffs and fueled widespread investor concerns.
Furthermore, Pakistan has secured a crucial financial lifeline with the IMF’s approval of a $1 billion disbursement under the Extended Fund Facility (EFF) and a $1.4 billion Resilience and Sustainability Facility (RSF).
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These events took place at the same time as the State Bank of Pakistan (SBP) had decided to lower the policy rate by 100 basis points to 11 percent.
On May 9, the Executive Board of the International Monetary Fund (IMF) formally approved a $1 billion disbursement for Pakistan under the EFF, marking a significant step in the country’s ongoing economic stabilisation efforts.
The tranche was greenlit following Pakistan’s successful completion of key performance benchmarks. The EFF programme, which is designed to support countries facing balance-of-payment difficulties, spans a 37-month period.
Additionally, Pakistan is also a participant in the Resilience and Sustainability Facility (RSF), which is aims at enhancing climate resilience and spans 28 months. However, the current disbursement only pertains to the EFF.
WEEK-LONG VOLATILITY
A day after terrible shedding triggered by geopolitical aggravation, the Pakistan Stock Exchange (PSX) stood from the ground up on Friday last.
The benchmark KSE-100 Index was hovering at 105,759 after gaining more than 2,200 points during the opening hours of trade. Later, things further improved and the index closed at 107,174 after attaining 3,647 points.
Across-the-board buying was observed in key sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration companies, OMCs, and power generation.
Besides, index-heavy stocks, including HUBCO, MARI, OGDC, PPL, POL, PSO, and SNGPL, also traded in the green as bulls returned to the PSX.
Experts linked the latest bullish spree with meeting of the Executive Board of the International Monetary Fund (IMF).
In the preceding week, the PSX grappled with downward trend amid war clouds. Thursday’s trading started off on an encouraging note as the index rose to 111,881 after gaining 1,800 points. However, the euphoria proved short-lived.
The KSE-100 index plummeted by 7,516 points to 102,492 at one point, prompting the managers to stop the activities.
The situation could not much improve and the KSE-100 index eventually closed at 103,526 after losing 6,482 points. In all, the PSX lost more than 12,000 points in the last two days (Wednesday and Thursday).
