Rising stocks smash barriers to set new limits amid the boost given by energy and banking sectors
Business
Investor are confident amid foreign investment promises, tariff hikes to deal with circular debt
KARACHI (Web Desk) – The Pakistan Stock Exchange set new milestones on Wednesday as the benchmark KSE-100 Index was up 0.71 per cent, or 447.13 points, after the listed companies associated with energy business again led the charge.
The session saw the benchmark index breaching two ceilings – first smashing the 63,000 points barrier and later briefly crossing the 64,000 mark.
However, the KSE-100 Index settled at 63,917.72 to close the session after a net gain of 961.70 points, or 1.53 per cent, against the last session’s value of 62,956.02, which means it vacillated between a high of 64,038.83 and low of 63,188.71.
Meanwhile, experts believe that the stock market will cross the 65,000 points mark later this month and could move even higher because investors want to take advantage of this momentum and aren’t expected to go for profit-taking.
It is not just the foreign investment pledges and the improvement in macroeconomic indicators which have been propelling the market towards new highs continuously.
The reasons behind a strong performance being shown by the power and gas companies – along with banks and other financial institutions which are benefiting from the high interest rates and a weakened rupee – also include the previous and planned tariff hikes which help dealing with the circular debt issue, albeit at the cost of consumers who are already crushed by the rising cost of living.
With inflation rate surging yet again as shown by the figures released for November, any further gas tariff increase will only worsen the cost-of-living crisis for an overwhelming majority, thus negatively impacting domestic demand which is already shrinking.
So moves like increasing power and gas tariffs may boost the energy stocks, but the overall consequences for the people and the economy aren’t going positive.
It also raises the question of understanding the causes behind the record-breaking streak being witnessed by the stock market as there are very little signs of expanding businesses or establishment of new ones amid the unprecedented interest rate hikes with no immediate cuts in the offing.
The new records being set by the Pakistan Stock Exchange reminds us about the similar trend witnessed in global markets, especially the Wall Street, where the tech companies and other giants made huge profits during and after the Covid pandemic.
However, the low-income groups as well as the middle classes in West came off worst in the process amid a widening rich-poor divide and shrinking purchasing power.
