KARACHI (Web Desk) – Pakistan Stock Exchange (PSX) reached another milestone on Monday as the benchmark KSE-100 Index first surpassed the 51,000 mark for the first time in over six years and later touched 51.419.86 during intraday trading.
However, the market could not sustain the rally amid selling pressure as market closed with the KSE-100 settling at 51,070.82 after a net gain of 338.96, or 0.67 per cent against the previous closing of 50,731.86. Overall trading volume for the KSE-100 Index was over 187 million shares.
The latest gains translate into a 25.14pc increase in the KSE-100 Index since the start of the current calendar year.
By the time this report was filed at 11:54am, the benchmark index was recorded at 51,334.14 against the previous closing of 50,731.86. It means the market is up 602.28 points, or 1.19pc.
It was in May 2017 that Pakistan qualified for the Morgan Stanley Capital International (MSCI) Emerging Markets Index in May 2017, an upgrade from Frontier Market Index.
The same month also saw the market reaching the all-time high of 53,124 points as the KSE-Index witnessed a huge surge during Nawaz Sharif’s third stint as prime minister.
However, the trend was reversed amid the political and economic uncertainty created by his disqualification with the index tanking to 37,919 points in a matter of seven months.
But the current value of market is around 70pc of the recorded back then in May 2017, which is the worrying sign for any investor.
Multiple factors including a stronger rupee, improved economic indicators [especially reduced trade deficit] and the energy sector boosted by the possibility of increase in gas tariffs, which help address the circular debt issue, are the reasons behind buoyant investors.
At the same time, the return of PML-N supremo Nawaz Sharif has also raised the hopes in some quarters for long-term political stability as he enjoys the record of generating economic activity in the country.
He is a strong believer in solid rupee and low interest rates while Pakistan’s economy has been crippled by sustained and unprecedented currency devaluation, inflation and borrowing cost.
However, Nawaz first needs to get his sentencing and disqualification overturned before fulfilling the promise of economic revival as the PML-N is already projecting as the four-time prime minister with his previous three terms cut short.
Meanwhile, the day also saw the PTI chairman and former foreign minister Shah Mehmood Qureshi being indicted in the cipher case, as political uncertainty continues affecting the country.
One important point that must be noted is that the stocks around the world are currently under pressure amid sustained high interest rates which is also resulting in increased bond yields, thus proving a headache for governments because of widening budget deficit.