Bulls charged at the Pakistan Stock Exchange (PSX) as the KSE-100 surpassed the 42,000 level in the outgoing week to finish with a gain of 956 points or 2.3%. Interest in cyclical and sideboard sectors kept the market buoyant as investor participation remained strong. The index maintained a healthy momentum on the back of declining yearly and monthly inflation and the strengthening rupee against the US dollar. Additionally, sector-specific developments also spurred buying interest in select stocks, which further fuelled the rally. The market finished four out of the five sessions in green to settle at 42,085 points. Monday witnessed volatile trading as investors cherished the lower consumer price index inflation number for September 2022 – which came in at 23.2% over the weekend. Additionally, the rupee’s winning streak against the US dollar in the interbank market revived investor optimism. The bullish rally continued to grip the stock market on Tuesday as investors took fresh positions after the trade deficit contracted 21.4% year-on-year to $9.2 billion in the July-September quarter of the current fiscal year, which gave a boost to the positive momentum. The rally became stronger on Wednesday as the PSX registered significantly high volumes of 636 million shares as market players engaged extensively in stock trading. Sentiments that remained bullish on Thursday helped the KSE-100 index extend the rally from the previous day and renewed investor interest pushed the benchmark KSE-100 index above the 42,000-point mark. The market continued its bullish momentum as investors cherished a drop in cut-off yields in the auction of T-bills. The market also expected positive developments after the Asian Development Bank assured Pakistan that it would give $2.3-2.5 billion for flood relief, providing vital support for flood relief. Unfortunately, the four-day buying spree ended as Moody’s report sparked concerns among investors, who remained cautious while trading stocks. The rating agency downgraded Pakistan’s credit rating to Caa1 from B3. The stock market expected further deterioration in the economic outlook of the country. Other major developments during the week were: SBP’s reserves fall by $106 million, Roshan Digital Account inflows clock in $5.14 billion in 25 months, Atlas Group exports auto parts worth $2 million, 12,000 bikes in six months, and K-Electric seeks exemption from expected credit losses (ECL) for two years. Meanwhile, foreign buying continued this week, clocking in at $4.7 million against a net buy of $0.15 million recorded last week. Buying was witnessed in technology ($6 million), power (0.4 million), and cement ($0.3 million). On the domestic front, major selling was reported by insurance ($5.7 million), followed by banks and development finance institutions ($4.4 million). During the week under review, average volumes clocked in at 434 million shares (up by 118% week-on-week), while the average value traded settled at $48 million (up by 32% week-on-week). Sector-wise positive contributions came from technology and communication (+360 points), power generation and distribution (+251 points), cement (+129 points), fertiliser (+115 points), and chemical (+44 points) On the flip side, negative contributions came from miscellaneous (-44 points) and paper and board (-6 points) Scrip-wise major gainers were Hubco (+227 points), TRG Pakistan (+171 points), Systems Limited (+170 points), Engro Corporation (+66 points), and Engro Fertiliser (+61 points). Meanwhile, losers were Pakistan Petroleum (-48 points), Pakistan Services (-41 points), MCB (-26 points), UBL (-24 points), and Fatima Fetiliser (-11 points). A report from Arif Habib Limited stated that the market is expected to remain positive in the upcoming week. “With the Monetary Policy Committee meeting on Monday, the market is expecting a status quo,” it said, adding an indication of a stable parity will also aid sentiment at the index.