Bulls dominated the trading floor on Friday as shares on the Pakistan Stock Exchange (PSX) surged 900 points in intraday trade.
The benchmark KSE-100 index rose 902.46 points, or 0.79 percent, to 114,744.58 from the previous close of 113,836.74 at 2:58 p.m.
Awais Ashraf, head of research at AKD Securities, attributed the upward trajectory to the market’s positive response “to today’s verdict in the corruption case, as it has eased concerns about political noise, and attention is now turning towards improvement of macroeconomic factors”.
He noted that a “disinflationary trend and a fully funded external account position could lead to a reduction in interest rates, encouraging investors to shift from fixed income instruments to equities.”
Earlier today, former Prime Minister Imran Khan and his wife Bushra Bibi were convicted in the £190 million Al-Qadir Trust case and the PTI founder was sentenced to 14 years in prison and seven years in prison for his wife.
Judge Nasir Javed Rana announced the verdict, which was earlier delayed three times, in a makeshift courtroom in Adiala jail. The court also imposed fines on Imran and Bushra, worth Rs 1 million and Rs 500,000, respectively. Failure to pay the fines would result in an additional six months in jail for Imran and three months for Bushra, the court said.
Meanwhile, Yousuf M. Farooq, director of research at Chase Securities, attributed the bullish momentum to the market reacting positively to the announcement of a current account surplus of $582 million for December and a drop in the Price Sensitive Index ( SPI) during the past week. .
“Inflation is expected to remain low over the next year, supported by a stable currency and a balanced current account,” he said. “As always, political instability in Pakistan remains the main downside risk to the market, while oil prices present an upside risk to inflation.”
“We anticipate that interest rates could fall to single digits in FY25, provided government spending is kept under control, and the stock market is likely to remain buoyant over the next year,” he added.
Stocks extended losses overnight yesterday, despite a series of interest rate cuts, as the sharp contraction in the large-scale manufacturing (LSM) sector shook investor confidence in the economic outlook. , leading the benchmark KSE 100 index to fall below 114,000. .
An analyst had pointed out that the downward momentum observed earlier occurred after news broke about the start of dialogue between the establishment and senior opposition leaders. This development created uncertainty among investors, raising concerns about potential challenges to the ruling coalition government and its policies.
Opting for a cautious mood, investors remained vigilant ahead of a critical ruling in the £190m Al-Qadir Trust case.
More to follow
