PSX weekly roundup: market hits record high amid improving economic indicators

KARACHI: The Pakistan Stock Exchange (PSX) surged to a new record during the outgoing week, driven by falling bond yields and positive economic indicators, Mettis Global reported.

By Friday’s closing, the benchmark KSE-100 Index had reaching an all-time high of 82,074 points. This is 2,741 points, or 3.5 per cent, gain on opening status for the week. Throughout the week, the index posted significant fluctuations with a trading range of 3,004 points, peaking at 82,372 points and hitting a low of 79,368 points.

Weekly inflation declines, but yearly prices up 12.72 per cent: PBS report

Interest rate cuts by the State Bank of Pakistan (SBP) added to the positivity in market sentiment. The current account also showed surplus after remaining in deficit for over three months. This came as a result of rising remittances, and despite rising imports.

Continuing reduction in inflation also lent strength to the market. For September 2024, inflation is likely to be recorded at 7.5 per cent, after it entered single digits in August 2024.

Even though foreign investors remained heavy sellers, the improvement in overall index offset that effect. In USD terms, the index posted a 3.6 per cent rise, marking its largest weekly increase since June, Mettis Global said.

Foreign investors offloaded $23.2 million, in sectors like fertiliser, oil and gas exploration, and banking. This was offset by the local mutual funds stepping in with net purchases totalling $15.53 million, primarily targeting fertiliser stocks.

CPI inflation may drop to lowest level since January 2021

Sector-wise, banking, oil and gas, fertiliser, and cement were the key contributors to the market’s gains, while negative contributions came from the construction, refinery, engineering, and automobile sectors, Mettis Global said.

However, analysts say that despite the rally, the market remains relatively undervalued compared to its historical levels and global peers.