KSE-100 index crosses 137,000 points on investor optimism and economic upturn

The Pakistan Stock Exchange (PSX) extended its bullish run on Tuesday, crossing the key psychological barrier of 137,000 points during intra-day trading amid renewed investor confidence and an improved economic outlook.

The benchmark KSE-100 index surged by 1,237.03 points, or 0.91%, reaching 137,739.56 points from the previous close of 136,502.53. This marks a new all-time high for the index.

Trading began on a strong note, with the market gaining 1,205.1 points (0.88%) by 9:45 am to touch 137,707.63 points. Although the index dipped briefly to 136,498.16 points at 10:15 am, it quickly recovered, maintaining upward momentum. Total trading volume stood at 152 million shares, valued at Rs 11.87 billion.

Market analysts attribute the rally to multiple positive economic indicators, including a rise in workers' remittances, robust auto sales, and a boost in foreign exchange reserves.

Read: Shares cross 135,500 mark amid positive economic indicators

Mohammad Sohail, CEO of Topline Securities, said aggressive buying by local institutional investors has propelled the market to historic highs. 

He added that this rally is primarily driven by banking sector stocks, as investors expect attractive dividend payouts from banks.

Commenting on the market's trajectory, economist and market expert AAH Soomro noted that, following a sharp rally, the market appears to be entering a phase of consolidation. However, the underlying fundamentals remain strong, supporting the continuation of a bull run. Attention now turns to the corporate earnings season.

Investor sentiment is also being buoyed by upcoming developments, including the expected issuance of Panda bonds, foreign funding prospects, and progress in debt management.

Read: PSX hits record high as post-budget bullish trend continues

Adding to the optimism, Finance Minister Muhammad Aurangzeb on Monday hinted at the potential for a policy rate cut, stating that there is room for monetary easing, though the final decision lies with the State Bank of Pakistan (SBP).

The SBP, in its last monetary policy meeting, kept the benchmark interest rate unchanged at 11%, citing external risks and inflationary pressures, particularly due to the ongoing Iran-Israel conflict. The central bank had earlier slashed the rate by 100 basis points on May 5, bringing the total cut to 1,100 basis points since June 2024, down from a record high of 22%.