Webdesk: The stock market continued its upward trend as the new week started. The KSE-100 Index surpassed the 133,000 mark for the first time during intraday trading. Strong investor confidence played a significant role in this surge. This confidence stemmed from advancements in trade talks, better economic indicators, and hopes for solid earnings.
On Monday, the benchmark index of the Pakistan Stock Exchange (PSX) touched an intraday high of 133,720.54, gaining 1,771.48 points or 1.34 per cent. The lowest point of the session stood at 132,467.12, still reflecting a 518.06-point rise or 0.39 per cent.
“Tariff deal and continued optimism are fueling the rally. Technically, we’ve breached multiple new highs. Earning season is also around the corner, so all this is fueling the rally at the moment,” said Ahfaz Mustafa, CEO of Ismail Iqbal Securities.
Investors remain upbeat, encouraged by lower inflation, stronger foreign reserves, and fresh capital coming into the market. Analysts expect the rally to continue, especially as more investors move away from fixed-income products due to increased taxes and shrinking returns, favouring equities instead.
After closing FY25 as the best-performing market in the region with a 60 per cent total return, the PSX has carried that strength into the new fiscal year. Trading activity also picked up, with average daily volumes rising by 31 per cent week-on-week, showing higher investor involvement.
Confidence in the economy is a key reason behind the market’s rise. Pakistan recently received $3.4 billion through refinancing and rollovers from China, along with another $1.5 billion in financial support from Gulf countries and global institutions.
As of June 30, the State Bank of Pakistan’s reserves stood at $14.51 billion.
To make the outlooks brighter, inflation numbers reported in June indicated a significant eased pace. Consumer Price Index increased only by 3.2 per cent on y-o-y basis, which adds up to the average inflation of FY25 to 4.5 per cent (a significant decline compared to 23.4 per cent experienced during FY24).
This has raised expectations of the potential of an interest rate reduction that would make even more attractive equities, to investors.
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