Pakistan Stock Exchange celebrates progress in govt formation with over 1.50pc surge
Business
Market has been witnessing downward movement after Feb 8 polls generated a split mandate
KARACHI (Web Desk) – The Pakistan Stock Exchange on Wednesday reacted positively with an over 1.50 per cent gain to the announcement that different political parties will back the PML-N candidate – Shehbaz Sharif – to form the new government, as the Feb 8 elections had produced a fractured mandate against the hopes and predictions of a strong elected setup.
As the session ended for the day, the benchmark KSE-100 Index settled at 62,153.84, representing a gain of 926.92 points or 1.51 per cent, after touching a high of 62,432.25.
Earlier on Tuesday, the market reversed the massive losing streak and returned to the green zone by settling at at 61,226.92, representing a net gain of 161.61 points or 0.26pc, in a volatile session which saw the KSE-100 Index at one point dropping over 1,400 points – a trend visible since Friday, a day after the much-awaited elections.
On Tuesday night, various political parties including PPP, MQM-P and others announced their support to the PML-N to get Shehbaz Sharif, the party president, as the new prime minister.
The development came as three-time minister Nawaz Sharif bowed out of the race to assume the office for a record fourth term and also nominated Maryam Nawaz – his daughter and political scion – for the coveted slot of Punjab chief minister after the party managed to obtain a simple majority by attracting some independents.
It was widely believed that Nawaz would be interested to become the prime minister only if his party managed a clear mandate – at simple majority – a scenario that could not be ensured.
Meanwhile, the imminent increase in gas prices also contributed to the positive sentiments as the move – which would adversely affect the inflation-hit masses but benefit the energy sector in general and the gas distribution companies in particular, while also helping to deal with the circular debt issue.
The gas price hike was on the cards for being one of the key demands set by the IMF, as Islamabad cannot afford antagonising the world’s top lender amid the prevailing economic crisis.
However, one has to see how the stock market will act in the coming days after the US shares suffered losses on Tuesday and the Asian markets, barring those in China and Hong Kong, followed the trend on Wednesday after the higher-than-expected US inflation data means the Federal Reserve won’t go for interest rate cuts soon.
The consumer price index (CPI) report also boosted the US dollar and Treasury yields as the world’s dominant currency has already been surging this year after the persistent inflation dampen the hopes of early Fed rate cuts.
