For the first time in history, the Pakistan Stock Exchange (PSX) benchmark index KSE-100 touched 78,000 points, gaining 1,900 points (2.5%) on Monday to close at 78,661 points, compared to the last close of 76,707.
The market started positively and traded in green throughout the session. It was closed for four days due to the Eid holidays. Analysts attributed the surge to strong corporate earnings, increased foreign buying amid improvement on the country’s risk profile in Morgan Stanley’s review, and expectations for higher dividends by mutual funds before June’s end.
In addition, the depreciation in USD/PKR parity also helped investors better understand its impact on inflation readings. Which may spur SBP into another rate hike.
It is significant to mention here that the IMF Staff Level Agreement reached over the past weekend would be the main driver for the latest uptick. It will pave the way towards disbursement of $2.8bn within the next two months. Which should ease pressure on PKR while providing much-needed cushion FX reserves. Which have been declining over the past few months.
Moreover, average daily trading volumes were recorded on an 18% DoD basis. Where significant contributions came from banks, followed by cement and exploration & production Stock Exchange accounting for ~33% of total volumes.
Analysts believe that investors took position ahead of the budget announcement expected next month. Others expect some clarity over additional taxes imposed through Finance Bill 2021-22 presented earlier this month. hence, sentiments remained positive at PSX.
