PSX hits all-time high of 72,051 points on economic hopes

This can be major trigger for equities, and is leading to interest in highly leveraged sectors such as cement, textile: analysts

By Web Desk
April 24, 2024
Stockbrokers monitor the latest share prices during a trading session at the Pakistan Stock Exchange (PSX) in Karachi on December 2, 2022. — APP

KARACHI: Pakistan stocks hit another record high by surpassing the 72,000 point mark as investors cheered a major recovery in foreign exchange reserves amid hopes of a cut in the key interest rate with a consequent decrease in inflation expected in the near future.

The benchmark KSE-100 Index closed at 72,051.89 after gaining 692.49 points or 0.97%. The index gained976.49 points or 1.37% during the intraday trading to reach72,335.89 points, up from the previous close of 71,359.41 points.

The picture shows the KSE-100 at 10:19am. — PSX website

Raza Jafferi, the CEO ofEFG Hermes Pakistan, told that the gain was due to theimprovement in the economic metrics, especially in foreign exchange reserves and inflation trajectory, which are giving rise to monetary easing expectations.

"This can be a major trigger for equities, and is leading to interest in highly leveraged sectors such as cement and textile which are driving the newest leg of the rally," said Jafferi.

Topline Securities CEO Muhammad Sohail told Geo News that the KSE-100 index has set another record. He said that consumer inflation is expected to decrease after a record current account surplus.

"Investors believe that the interest rate will decrease in the coming months," added Sohail.

Stocks a day earlier ended slightly lower in mixed trade as early gains driven by a rally in the cement sector were erased by profit-taking in the later session, traders said.

The KSE 100-share index fell by 74.06 points or 0.10% to close at 71,359.41 points.

“Stocks closed under pressure amid higher trades on weak global crude oil prices, reports over refineries shutdown and expectations over prudent SBP policy announcement next week ahead of new IMF loan talks next month," said analyst Ahsan Mehanti at Arif Habib.

"Shanghai Electric Power’s withdrawal on KE acquisition offer, uncertainty over Pakistan-US relations on Pakistan-Iran trade pacts and weak rupee played a catalytic role in the negative close."