KARACHI: The Pakistan Stock Exchange (PSX) surged to a new all-time high on Tuesday, driven by strong post-26th Amendment gains. The KSE-100 index rose 409 points, or 0.48%, to close at 86,466, surpassing yesterday’s close of 86,057. Early in the day, the index reached a new peak, climbing 798 points to 86,846 during intraday trading.
The market continued its upward trend due to several positive factors. Analyst Ahsan Mehanti from Arif Habib Corp highlighted a $119 million current account surplus for September and a 48% year-on-year increase in foreign direct investment (FDI) for the first quarter of FY25. This increase amounted to $771 million. These economic indicators, especially the largest current account surplus since April 2024, fueled market optimism.
Notably, the surplus compared favorably with a $29 million surplus in August and a $218 million deficit in September 2023, according to data from the State Bank of Pakistan.
Following a period of cautious trading, the market received a significant boost after the enforcement of the 26th Amendment. This constitutional change brought an end to weeks of political uncertainty. The ruling coalition successfully passed the amendment, which limited the judiciary’s power to appoint the Chief Justice of Pakistan. The amendment was approved during an extraordinary session of parliament, which continued through Sunday night into early Monday morning.
As a result, several sectors saw increased buying activity. These sectors included automobile assemblers, cement, chemicals, commercial banks, oil and gas exploration companies, oil marketing companies (OMCs), and refineries.
Moreover, the ongoing corporate earnings season further lifted investor sentiment. Bullish forecasts for high-valuation sectors prompted investors to take strategic positions. Many anticipate that corporate earnings for the first quarter of FY2024 will show significant growth.
PSX Hits Record High Amid Post-26th Amendment Gains
The Pakistan Stock Exchange (PSX) soared to an all-time high on Tuesday, driven by optimism following the enforcement of the 26th Constitutional Amendment. The KSE-100 index closed 409 points higher, reaching 86,466, surpassing its previous close of 86,057. During early intraday trading, the index climbed by 798 points, peaking at 86,846.
Several positive economic factors contributed to the market’s rise. Analyst Ahsan Mehanti from Arif Habib Corp pointed to a $119 million current account surplus for September and a 48% year-on-year increase in foreign direct investment (FDI) during the first quarter of FY25, amounting to $771 million. These figures marked the largest current account surplus since April 2024, fueling market confidence.
Impact of the 26th Amendment on Trading
The recent enforcement of the 26th Amendment provided a significant boost to the PSX. The amendment, which limited the judiciary’s power in appointing the Chief Justice of Pakistan, was passed after weeks of political uncertainty. Following the amendment’s approval, various sectors, including automobile assemblers, cement, chemicals, commercial banks, oil and gas exploration companies, oil marketing companies (OMCs), and refineries, saw increased buying activity.
Corporate Earnings Drive Investor Sentiment
The ongoing corporate earnings season also lifted investor sentiment. Strong forecasts for high-valuation sectors encouraged investors to take strategic positions, particularly in anticipation of substantial growth in first-quarter earnings for FY2024.
Expert Views on Market Momentum
Khurram Schehzad, CEO of Alpha Beta Core, attributed the market’s rise to growing confidence in economic and political stability. He pointed out that expectations of lower inflation and interest rates were also driving the bullish trend. Additionally, investors are closely watching the finance minister’s visit to the US. Muhammad Aurangzeb, Pakistan’s finance minister, is currently leading a delegation to the World Bank and IMF Annual Meetings in Washington DC.
Meanwhile, brokerage Arif Habib Limited (AHL) noted that the index continued to gain momentum as recent highs were exceeded. Among the key contributors to the market’s rise were Systems Limited, which gained 7.44%, Lucky Cement, which rose 2.61%, and Hub Power Company, which saw a 1.59% increase.
Investors are also considering disinflationary trends. According to AHL, October’s Consumer Price Index (CPI) is projected to increase by 6.3% year-on-year, significantly lower than the 28.48% inflation recorded in the same period last year. The average inflation rate for the first four months of FY25 now stands at 8.50%.
Market Outlook and Trading Volume
Despite the positive outlook, AHL cautioned that the KSE-30 index has yet to outperform its previous high from October 8, even as the KSE-100 index continues to set new records. The brokerage added that support for the KSE-100 has risen to 85,000 points, with further upward movement expected.
Out of 451 actively traded stocks, 241 saw gains, 149 declined, and 71 remained unchanged. K-Electric led the market with 224.204 million shares traded, followed by World Call Telecom with 30.203 million shares and Fauji Foods with 26.100 million shares. The total trading volume increased to 722.209 million shares, up from 474.949 million on Monday.
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