Stock market index rises by 2.8% over the past week and continues its monthly increase

The Pakistan Stock Exchange (PSX) saw a substantial increase of 2.8% in the KSE-100 index, closing the week at 166,678 points. The rise was attributed to strong buying activity across various sectors including fertiliser, banks, technology, cement, and exploration & production (E&P).

Throughout November, the market displayed a positive trend, with the benchmark index gaining 5,046 points on a month-on-month (MoM) basis. This upward trajectory was mainly driven by sector-specific progress and improvements in macroeconomic indicators.

The PSX opened the week with a stable Monday, showing limited volatility and little movement as investors awaited clearer signals. The day ended with the KSE-100 settling at 161,984 points, marking a minor decline of 0.07%. Tuesday and Wednesday continued the subdued trend, with slight decreases in the index. However, as the week progressed, signs of recovery began to emerge with the index closing higher on Wednesday.

Thursday witnessed a significant uptick in the market, with the KSE-100 closing at 165,373 points, up 1.34% from the previous day. This surge in prices led to the index crossing the 165k mark for the first time in 25 days. The positive momentum carried through to Friday, with the KSE-100 settling at 166,678 points, a gain of 0.99%.

Arif Habib Limited (AHL) highlighted that the market’s bullish shift in November was driven by positive catalysts in various sectors. For instance, the fertiliser sector received approval to shift from costly re-gasified liquefied natural gas (RLNG) to Mari gas, leading to stable urea prices. Additionally, companies like Fauji Fertiliser Company (FFC), Pakistan Petroleum Ltd (PPL), and Pioneer Cement saw significant gains during the month.

In November, the KSE-100 index showed returns of 3.1% and 3.3% in rupee and dollar terms, respectively. Meanwhile, Pakistan recorded a trade deficit of $3.28 billion in October, contributing to a widening trade deficit for the fiscal year. Despite economic challenges, there were positive indicators such as growth in the large-scale manufacturing (LSM) sector and an increase in remittances from overseas Pakistanis.

Muhammad Waqas Ghani, Research Head at JS Global, commented on the market’s performance, noting the broad-based rally driven by sectors like fertiliser, banking, technology, cement, and exploration & production. Although a decline in trading volumes was observed, the government’s successful auctions of T-bills and Sukuk bonds indicated strong investor interest.

Looking ahead, ongoing developments in various sectors, government policies, and external factors such as IMF recommendations and energy sector reforms will continue to influence the market. Despite some challenges, the PSX remains resilient, supported by improving economic indicators and investor confidence.