Karachi, December 23, 2024 – The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) experienced a significant surge on Monday, climbing by 4.03% or 4,411 points, driven by the initiation of talks between the Pakistan Tehreek-i-Insaaf (PTI) party and the government. The KSE-100 index closed at 113,924 points, a notable increase from last Friday’s closing of 109,513 points.
Analysts attributed the rise in the KSE-100 index to growing investor confidence following the start of dialogue between the government and the largest opposition party, PTI. Investors are hopeful that these discussions could lead to greater political stability in the country, which would positively impact the economy and the stock market. This optimism was particularly significant considering the PTI had previously announced a civil disobedience movement, set to begin on December 24, 2024, which was expected to negatively affect the stock market. However, with the commencement of talks, PTI called off the movement, sparking positive market sentiment.
The surge in the KSE-100 index was marked by broad-based buying across key sectors. Investors flocked to index-heavy stocks, with sectors such as automobile assemblers, cement, chemicals, commercial banks, fertilizers, oil and gas exploration, oil marketing companies (OMCs), and power generation all showing gains. Notable performers included HUBCO, SSGC, SNGP, MARI, OGDC, PPL, HBL, MCB, MEBL, and UBL, all of which traded in the green, contributing significantly to the upward movement of the KSE-100 index.
The buying momentum in the market was also fueled by several key indicators. One of the major factors was the recent correction in the market, following the central bank’s decision to cut the policy rate by 200bps, bringing the rate down to 13%, a total reduction of 900bps from its recent peak. This shift in monetary policy provided a favorable environment for equities, leading to a resurgence in investor interest.
Equities have outperformed other major asset classes in 2024, with the KSE-100 index showing a remarkable gain of 75% from January 1, 2024 to December 20, 2024. This performance includes dividends received during the period, as noted in a report by Topline Securities.
Despite facing significant pressure in the previous week due to heavy selling and profit-taking by mutual funds and institutions, the KSE-100 index has bounced back strongly. The market had declined by 4,788.65 points in the week prior, closing at 109,513 points. However, today’s rally signals renewed optimism and market recovery driven by political stability hopes.