The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) continued its surge for a second session on Monday, gaining 1.78pc to close over the 43,500-point level. This boosted market confidence.
Reasons for the upswing include the strengthening of the rupee against the dollar, falling yields on Pakistan’s international bonds, and optimistic news from the IMF. The news cycle acted as a catalyst for investor buying, which sent the KSE-100 index up 764.25 points, or 1.78pc, at the market’s close. By the end of trading, the index had reached a final reading of 43,621.82 points.
The day started off strong for the market as the index shot up. Multiple positive developments worked together to keep the stock market’s upward trend going. The automobile, cement, banking, and oil industries, which each contribute significantly to the benchmark index, received a flood of new capital.
On Friday, the benchmark KSE-100 index finished the week at 42,857.57 points, an increase of 761.33 points from the previous Friday’s close. The news that Saudi Arabia intends to renew its $3-billion deposit in assistance to Pakistan and intends to offer $100m per month in petroleum goods that would be granted as extra support boosted market sentiment even further.
As of this week, the State Bank of Pakistan (SBP) is expecting a $3b renewal deposit from the Saudi Ministry of Finance. With this new aid, the International Monetary Fund (IMF) estimates that Pakistan’s funding gap will be closed. With this reassurance, the International Monetary Fund board can provide its blessing before the month’s end.
In addition, the rupee’s upward trend versus the US dollar extended into a tenth consecutive session on Monday, when it finished at a new high of 213.98 in the inter-bank market. The Rupee has risen against the US Dollar for 10 days in a row, and it finished today at a level of 214. Market opened on a good tone and stayed positive throughout the day when the market made an intra-day high of 801 points over rupee’s rise versus the US dollar, lower worldwide oil prices, and plans of renewing $3b deposit from Saudi Arabia. The additional aid of $10b in petroleum products over ten months, or $100m every month.
Engineering (3.2pc), technology (2.6pc), and electricity (2.6pc) all contributed to the growth. On Monday, the volume of the all-share index rose to $541.55m, from $373.85m on Friday. Shares with a value of Rs16.8b changed hands, up from Rs10.6b the previous day.With 58.6m shares traded, K-Electric dominated the volume, followed by Pak Refinery with 38.7m and WorldCall Telecom with 37.7m. On Monday, the stock prices of 368 firms moved in one of three ways: up 272, down 75, or flat at 21.