PSX records historic high of 109,054 points with 7.6% gain amid strong economic recovery
The Pakistan Stock Exchange (PSX) achieved a historic milestone this week as the KSE-100 index surged to an all-time high of 109,054 points, marking a weekly gain of 7.6% or 7,697 points. This impressive performance cements the PSX’s position as the world’s best-performing market in terms of US dollar returns during the week.
Key economic indicators fueled the rally, including a sharp decline in inflation to 4.9%—the lowest since April 2018—along with the extension of Saudi Arabia’s $3 billion deposit for another year. Optimism was further buoyed by Pakistan formalizing $560 million in contracts with Saudi Arabia and a government auction raising Rs353 billion through Ijarah Sukuk.
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The market’s performance was underpinned by strong activity in key sectors, with fertiliser, banking, oil and gas exploration, cement, and power generation leading the gains. Heavyweights such as Mari Petroleum, Engro Corp, and UBL were among the top contributors. Meanwhile, cement dispatches climbed 6% year-on-year (YoY) to 4.15 million tons, signaling robust construction activity, while petroleum sales hit a 25-month high of 1.58 million tons in November.
Despite foreign investors offloading shares worth $12.2 million, the market witnessed a surge in local buying, particularly by mutual funds and banks. Average daily trading volumes reached a record 1.68 billion shares, a 72% increase week-on-week, with traded value climbing 49% to $198 million.
The week’s rally saw daily milestones, starting with a 1,900-point surge on Monday, driven by easing inflation data. By mid-week, the index had surpassed the 105,000-point mark, fueled by investor confidence in economic stability and expectations of a policy rate cut by the State Bank of Pakistan (SBP). The momentum continued with a 3,134-point jump on Thursday and an 800-point rise on Friday, closing above 109,000.
Analysts attribute the bullish trend to improving macroeconomic fundamentals, including rising foreign reserves, declining inflation, and expectations of a 150-200 basis point rate cut in the SBP’s December 16 monetary policy meeting. This anticipated cut would further support liquidity and equity market gains, with low market multiples leaving room for additional upside.
Other highlights included the SBP’s reserves increasing by $620 million, driven by a $500 million inflow from the Asian Development Bank (ADB). The trade deficit also narrowed by 7.4% YoY in the first five months of the fiscal year, offering further optimism for sustained growth.
Sector-wise contributions to the index came from fertiliser (1,748 points), commercial banks (1,434 points), oil and gas exploration companies (1,148 points), cement (716 points), and power generation (405 points). Top-performing scrips included Mari Petroleum, Engro Corp, and UBL.
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