PSX stays strong as positive economic signals boost sentiment

KARACHI: The Pakistan Stock Exchange maintained its bullish momentum on Tuesday, climbing 801.50 points (0.69%) to close at 117,001.09, driven by positive sentiment amid promising economic developments, analysts said.

The positive sentiment was largely driven by encouraging economic developments. As per the media reports, the IMF has permitted Pakistan to borrow Rs1.25 trillion ($4.5 billion) from domestic banks to help manage the Rs2.4 trillion circular debt in the power sector increasing public debt, Topline Securities stated.

“Investors’ confidence was further lifted as the IMF shared a draft of the Memorandum of Economic and Financial Policies (MEFP) with Pakistani authorities, marking progress towards a staff-level agreement under the $7 billion Extended Fund Facility (EFF). This reinforced hopes for sustained financial support and economic stability,” Topline Securities stated.

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The index gains were primarily fueled by FFC, ENGROH, HUBC, TRG, and LUCK, which collectively added 541 points.

“The positive momentum comes from improved investors’ confidence, driven by a mix of encouraging economic developments in Pakistan. The biggest factor is the IMF’s approval, allowing Pakistan to borrow from banks to help reduce the power sector’s circular debt,” Al Habib Capital note stated.

Additionally, the current account showed a surplus of USD 0.7 billion over 8MFY 25. On the top of that, exports saw an 8.42% YoY increase, and the REER index signalled further optimism.

Market participation remained robust, with 446 million shares traded and a total turnover of Rs 29.1 billion. PIBTL led the volume chart with 59 million shares exchanged.

The positive sentiment also prevailed in the last session on optimism surrounding government steps to deal with circular debt, and on expected IMF’s staff-level agreement to take place soon.