KARACHI:
The Pakistan Stock Exchange (PSX) extended its winning streak on Tuesday, holding firmly in positive territory throughout the session as broad-based buying across heavyweight sectors lifted market mood, with investors seemingly looking past the State Bank of Pakistan’s (SBP’s) latest rate hike amid softer international oil prices and hopes of progress towards resolving the United States-Israel war on Iran.
The index added 1,428.73 points, or 0.88%, to settle at 164,467.20. During the session, it touched a high of 164,787.67 and a low of 163,545.70, remaining in the green throughout the day.
The benchmark KSE-100 Index maintained its upward trajectory after a strong opening, building on early gains as buying interest gathered pace across cement, commercial banks, oil and gas exploration companies and oil marketing companies. The sustained advance reflected investors’ willingness to maintain exposure to equities despite the tighter monetary policy stance.
MCB Bank, Fauji Fertiliser, UBL, Pakistan Petroleum, and NBP remained among the key contributors to the market’s performance.
The market’s upbeat tone came despite the SBP’s decision to raise the policy rate by 50 basis points to 12%, effective Tuesday. While the increase had fuelled concerns over borrowing costs, buying across heavyweight sectors helped sustain the positive momentum.
Meanwhile, international oil prices fell amid hopes of easing hostilities in the Middle East, but persistent attacks on key producer Saudi Arabia and maritime shipping kept investors wary and prices near six-month highs.
Read: PSX recovers from policy rate-driven sell-off
The combination of these factors allowed the benchmark to extend its gains despite concerns over the implications of higher interest rates for businesses and economic activity.
Additionally, with the ongoing corporate results season, stock-specific activity continues to drive investor flows, leading to selective buying opportunities despite broader macroeconomic concerns. However, the overall outlook remains cautious amid persistent geopolitical uncertainty in the Middle East, Israeli elections, and the upcoming US midterm polls.
Cumulatively, trading volume increased to 401.9 million shares versus Monday’s total of 376 million while the value of traded shares stood at Rs18 billion. Shares of 497 companies were traded in the ready market, of which 282 stocks closed higher, 170 fell and 45 remained unchanged.
K-Electric was the volume leader with trading in 54 million shares, rising Rs0.15 to close at Rs5.80.
“The market witnessed a positive session, primarily supported by buying interest in commercial banks, cement, fertiliser, and automobile sectors,” Ahmed Sheraz of KASB KTrade noted. He added that Brent crude continues to trade around $115-116 a barrel, raising concerns over imported inflation, while elevated domestic inflation and the recent increase in the SBP policy rate to 12% may continue to weigh on investor sentiment.
Going forward, the market is expected to maintain a mixed-to-cautious trend, with corporate earnings, oil prices, geopolitical developments, and macroeconomic indicators likely to dictate direction. Selective, stock-specific activity may continue to support the index, although volatility is expected to remain elevated, Sheraz said.
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