Karachi: The Pakistan Stock Exchange (PSX) witnessed a strong bullish rally on Friday, with the benchmark KSE-100 index climbing 1,000 points in intraday trading.
At 4:12 PM, the KSE-100 index surged by 1,096.00 points, or 0.97%, reaching 114,302.40, up from the previous day’s close of 113,206.40. The upward momentum reflected a strong recovery following the market correction in the previous month.
Market Recovery Following Correction
Yousuf M. Farooq, director of research at Chase Securities, noted that the market had begun to recover after last month’s downturn. He highlighted that the market’s current performance is a positive sign for investor sentiment.
Farooq also pointed to the decline in the year-on-year Sensitive Price Index (SPI) to just 0.44% and the anticipated drop in the Consumer Price Index (CPI) below 3%. This, he argued, opens up the possibility of single-digit interest rates by 2025, which could further stimulate market growth.
Risks to Economic Recovery
Despite the positive outlook, Farooq cautioned that risks remain. A sharp rise in imports or excessive government spending could strain the external account and undermine the stock market’s recovery. “All eyes are now on the next IMF review in March,” he added, highlighting the importance of the upcoming negotiations in shaping the economic trajectory.
Speculation and Investor Confidence
The recent market rally followed a three-day losing streak. Analysts attributed the bullish trend to speculative trading in anticipation of the upcoming earning season and major corporate announcements. There was also optimism surrounding IMF proposals to ease the gas circular debt issue and the commitments from the recent US investor delegation, which helped boost investor confidence in the market.
Overall, the PSX’s recovery is seen as a sign of growing market optimism, although experts remain cautious about potential risks that could affect the economy and the stock market in the coming months.
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