Market sentiments remained positive at the Pakistan Stock Exchange (PSX) on Monday, as investors reacted positively to a sovereign credit rating upgrade, steady stream of robust corporate earnings, and reports related to circular debt reforms, with the benchmark KSE-100 Index gaining over 1,700 points to hit fresh all-time high.
At close, the benchmark index settled at 148,196.42, up by 1,704.79 points or 1.16%.
“Strong corporate results, expectation of lower interest rates is driving the market,” Samiullah Tariq, Head of Research at Pak Kuwait Investment Company Limited, told Business Recorder.
Meanwhile, analysts noted that liquidity conditions in the market appeared strong as funds went on a buying spree, shifting allocations from fixed income and money market instruments into equities.
Investor sentiments also remained positive, buoyed by Moody’s upgrade of Pakistan’s sovereign rating and a wave of strong corporate earnings that kept sentiment upbeat.
Moody’s raised Pakistan’s credit rating one notch to Caa1 from Caa2, shifting the outlook to stable. The decision, based on improving external buffers, fiscal consolidation, and progress under the International Monetary Fund (IMF) programme, has provided a powerful boost to market morale.
Meanwhile, brokerage house Topline Securities stated that market sentiment had brightened on reports of the government’s circular debt reform drive, which entailed reducing LNG cargoes, revising RLNG pricing, and mobilising funds through LNG diversion savings, SOE dividends, and power sector receivables.
“Detailed proposals are expected to be announced next week, sustaining investor optimism.”
Heavyweights LUCK, MEBL, BAHL, and PPL contributed a combined 756 points to the index’s upward momentum, Topline said.
During the previous week, the PSX climbed to then all-time intraday high of 147,534 points before closing at 146,492 points, up 1,109 points or 0.8% on a week-on-week basis.
Internationally, share markets edged higher in Asia on Monday ahead of what is likely to be an eventful week for US interest rate policy, while oil prices slipped as risks to Russian supplies seemed to fade a little.
A general risk-on mood saw indices in Japan and Taiwan make record peaks, while Chinese blue chips reached their highest in 10 months.
US President Donald Trump now seemed more aligned with Moscow on seeking a peace deal with Ukraine instead of a ceasefire first, after meeting Russian President Vladimir Putin in Alaska on Friday.
Trump will meet Ukrainian President Volodymyr Zelenskiy and European leaders later on Monday to discuss the next steps, though actual proposals are vague as yet.
The major economic event of the week will be the Kansas City Federal Reserve’s August 21-23 Jackson Hole symposium, where Chair Jerome Powell is due to speak on the economic outlook and the central bank’s policy framework.
Markets imply around an 85% chance of a quarter-point rate cut at the Fed’s meeting on September 17, and are priced for a further easing by December.
The prospect of lower borrowing costs globally has underpinned stock markets, and Japan’s Nikkei firmed 0.9% to a fresh record high.
MSCI’s broadest index of Asia-Pacific shares outside Japan was a fraction lower, having hit a four-year top last week. Chinese blue chips added 1.0%, bringing gains so far this quarter to almost 8%.
EUROSTOXX 50 futures and FTSE futures rose 0.2%, while DAX futures firmed 0.1%.
Meanwhile, Pakistani rupee started the week positive, marking its 7th consecutive gain against the US dollar. The local currency appreciated by 0.01% in the inter-bank market on Monday. At close, the rupee settled at 282.02, a gain of Re0.04.
Volume on the all-share index increased to 610.31 million from 473.60 million recorded in the previous close.
The value of shares rose to Rs39.17 billion from Rs32.88 billion in the previous session.
WorldCall Telecom was the volume leader with 40.72 million shares, followed by Pervez Ahmed Co with 29.75 million shares, and Al-Shaheer Corp with 26.35 million shares.
Shares of 487 companies were traded on Monday, of which 283 registered an increase, 175 recorded a fall, while 29 remained unchanged.
