Shares at the Pakistan Stock Exchange (PSX) experienced gains on Thursday, with the benchmark KSE-100 index rising by over 100 points amid mixed economic signals.
The KSE-100 index increased by 234.14 points, or 0.2%, during intraday trading, reaching 117,242.22 points at 3:19 PM. By the end of the session, the index closed at 117,119.65, reflecting a gain of 111.57 points, or 0.1%, from the previous close.
Market activity was influenced by economic developments and investor sentiment. Yousuf M. Farooq, research director at Chase Securities, noted that the market remained “jittery” due to higher-than-expected trade deficit figures. “Some participants suggest that the decline in interest rates might slow in the coming months, as the central bank may focus on addressing external account concerns,” he said.
Farooq highlighted that a significant current account surplus could create room for lower interest rates in the coming year. However, he cautioned that sustained high import volumes might limit the State Bank of Pakistan’s (SBP) ability to further reduce rates. “While inflation is trending downward, continued high import levels could exert pressure on the external account,” he added.
Recent data from the Pakistan Bureau of Statistics (PBS) showed that December 2024’s Consumer Price Index (CPI) inflation was at 4.1%, the lowest level in nearly seven years. Despite this, concerns over trade deficits and external account stability persisted.
Awais Ashraf, director of research at AKD Securities, observed that political tensions also impacted investor sentiment. He cited recent developments, including pardons granted to individuals convicted of attacks on ideological sites, as contributing to market volatility.
Despite these challenges, specific sectors performed well during the day’s trading. Ashraf noted that stocks in the Fertiliser, Tractor, and Banking sectors saw gains. “The Fertiliser and Tractor sectors benefitted from higher sales and the merger of ENGRO with Dawood Hercules Corporation Limited (DAWH), while the Banking sector was bolstered by expectations of increased deposit growth following the removal of the Advance-to-Deposit Ratio (ADR) tax,” he explained.
The session’s gains reflect a mix of optimism in select sectors and caution over macroeconomic and political factors, underscoring the complex dynamics shaping the market.
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