KSE-100 Index Soars to Record High Driven by Oil and Gas Sector

The Pakistan Stock Exchange (PSX) has been on an impressive upward trajectory, with the KSE-100 Index achieving a remarkable milestone. On Monday, the index surged by nearly 1,400 points, closing at an all-time high of 84,910.29 points. This significant increase of 1,378.34 points, or 1.65%, reflects a strong buying interest, particularly in the oil and gas sector, which has been a driving force behind this rally.

Investors have shown a keen interest in various sectors, including automobile assemblers, cement, commercial banks, and fertilisers. Notably, oil and gas exploration companies and oil marketing companies (OMCs) have also seen substantial trading activity. Stocks such as OGDC, PPL, ENGRO, PSO, and SNGP have all performed well, contributing to the overall positive sentiment in the market.

Experts attribute this buying frenzy to improved macroeconomic indicators and the anticipation of a potential policy rate hike in the near future. According to Sana Tawfik, Head of Research at Arif Habib Limited, the market is optimistic about a possible decline in the policy rate, which could range between 150 to 200 basis points. This optimism is fueled by a decrease in the inflation rate and money market yields, suggesting that investors are looking forward to a more favorable economic environment.

Despite the bullish momentum, it is important to note that this surge in the stock market comes amid rising security concerns in the country. Recently, a terrorist attack targeted a convoy carrying Chinese staff near Karachi’s Jinnah International Airport, resulting in the tragic loss of two Chinese nationals. Such incidents highlight the ongoing challenges that Pakistan faces, even as the economy shows signs of recovery.

Last week, the PSX also experienced a significant bullish trend, crossing the psychological barrier of 83,000 points for the first time in history. The KSE-100 Index rose by 2,239.83 points on a week-on-week basis, closing at 83,531.96 points. This remarkable performance has been supported by local investor interest and institutional backing.

On a global scale, Asian stocks have rallied, with Japan’s Nikkei leading the gains. The positive sentiment in international markets has also influenced local trading, as investors remain optimistic about future economic developments. The US dollar has reached a fresh seven-week peak against the yen, following strong US labor data that alleviated recession fears.

In the currency market, the Pakistani rupee experienced a slight decline against the US dollar, depreciating by 0.04% to settle at 277.64. This minor drop reflects the ongoing fluctuations in the currency exchange rates, which are closely monitored by investors.

Trading volume on the all-share index increased significantly, rising to 449.51 million shares from 381.53 million in the previous session. The total value of shares traded also saw a notable jump, reaching Rs30.19 billion compared to Rs20.52 billion earlier. Pak Petroleum emerged as the volume leader, followed by Hub Power Co.XD and Fauji CementXD.

The recent performance of the KSE-100 Index is a testament to the resilience of the Pakistani economy, driven by strong investor confidence and positive economic indicators. As the corporate result season approaches, market participants are eager to see how these developments will further influence trading activity. While challenges remain, the current bullish trend offers a glimmer of hope for investors looking to navigate the complexities of the market.