The Pakistan Stock Exchange (PSX) saw a strong recovery on Thursday, with shares climbing more than 800 points during intraday trade. Analysts attributed the rally to improving macroeconomic stability, which encouraged investor confidence.
After a slight dip on Tuesday, when the market snapped its record-breaking streak, the PSX bounced back on Wednesday with a modest 131-point recovery. Thursday’s surge marked a stronger comeback, with the benchmark KSE-100 index rising significantly.
KSE-100 Index Hits 94,161 Points
At around 11 am, the KSE-100 index had risen by 548.58 points, or 0.59%, reaching 93,904.00 points, up from the previous close of 93,355.42. By 1:44 pm, the index had surged further, gaining 806.19 points to stand at 94,161.61 points. This sharp rise reflected the market’s renewed optimism.
Macroeconomic Stability Drives Investor Confidence
Yousuf M. Farooq, director of research at Chase Securities, explained that the market’s positive momentum was driven by several factors. He noted that, as returns from fixed-income mutual funds began to decline, more investors were shifting their cash into equities.
“Macro indicators appear stable, though some tax adjustments may be necessary to meet targets,” Farooq said. He also pointed out that the overall economic situation in Pakistan seemed to be improving.
According to Farooq, the accumulation of circular debt had halted, and there were positive signs in various sectors. He mentioned that sales of bikes, cars, and fast-moving consumer goods (FMCGs) had increased. The property market, too, was showing signs of activity, with buyers rushing to make purchases amid growing market concerns.
Market Conditions Remain Cautious
While the market showed strong growth, Farooq cautioned that large rallies could lead to sharp corrections. He advised investors to be careful and ensure they were making informed decisions. “Stocks are long-term instruments and should not be bought with money needed in the short term,” he said, emphasizing the need for caution during periods of market volatility.
Valuation and Fixed Income Decline Attract Investors
Awais Ashraf, director of research at AKD Securities, attributed the recovery to the appealing valuation of the KSE-100 index. He noted that the decline in fixed-income yields and commodity prices, combined with strengthening macroeconomic stability, had brought investors back to equities.
“Investors are finding value in stocks as fixed-income returns decline,” Ashraf said. He highlighted the country’s controlled current account and improved fiscal outlook, which had bolstered investor sentiment. “With better prospects for securing more flexible terms with the IMF, the overall economic environment is stronger,” he added.
Follow Day News on Google News, Instagram, YouTube, Facebook, Whats App, and TikTok for latest updates
