Bulls reassert dominance in PSX as KSE-100 index surges by 903.76 points

KARACHI: The Pakistan Stock Exchange (PSX) witnessed a robust resurgence of bullish activity on Tuesday, reversing the majority of the losses incurred on Monday. Analysts attribute this turnaround to a clearer outlook on the appointment of a caretaker government and other contributing factors.

The benchmark KSE-100 index surged by 903.76 points, or 1.91%, closing at 48,333.58 points. This surge also marked an intraday peak during the trading session.

In the preceding trading session, the market underwent a pronounced sell-off, with the benchmark KSE-100 index plummeting by 956 points, equivalent to 1.98%. The session concluded with the index settling at 47,429.82 points, driven by a confluence of factors.

Mohammed Sohail, CEO of Topline Securities, said that the market’s resilient response on Tuesday stemmed from reports indicating heightened clarity surrounding the upcoming caretaker government setup, coupled with the potential ratification of the refinery policy by the federal cabinet, according to Dawn.

Sohail elaborated, stating, “The market displayed a positive reaction in response to these developments, recouping its earlier losses. The ongoing momentum and sentiment within the market seem conducive to further advancement.”

Ahsan Mehanti, CEO of Arif Habib Commodities, noted that the trading day concluded on a bullish note, crediting this trend to news circulating about the prospective appointment of a caretaker prime minister and the International Monetary Fund’s endorsement of a circular debt management strategy, complemented by corporate dividend issuance by State-owned Enterprises.

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Mehanti further underscored the pivotal role played by the rupee’s resurgence, bolstered by encouraging economic data reflecting a favorable trade deficit for July 2023, as a significant catalyst in propelling the bullish closure.

Raza Jafri, Head of Research at Intermarket Securities, highlighted the KSE-100’s impressive recovery, recouping nearly all of the previous day’s losses. Jafri pointed to a surge in buying activity within state-owned oil exploration firms, propelled by renewed optimism about the resolution of circular debt.

Additionally, Jafri highlighted a substantial upsurge in buying interest in power sector stocks, particularly influenced by Lalpir Power’s noteworthy cash dividend payout of Rs15 per share.