Bulls rampant at PSX as shares climb 4,000 points, marking 2nd highest single-day gain

Bullish momentum continued at the Pakistan Stock Exchange (PSX) as shares climbed more than 4,000 points on Monday.

The benchmark KSE-100 index climbed 3,021.94, or 2.76 per cent, to stand at 112,535.08 points from the previous close of 109,513.14 at 11:18am. At 2:46pm, the index stood at 113,874.01, up by 4360.87 points or 3.98pc, from the last close.

Finally, the index closed at 113,924.41 points, up by 4411.27 points or 4.03pc, from the last close.

Topline Securities, a brokerage firm in Karachi, noted that this was the KSE-100 index’s second highest gain.

Yousuf M. Farooq, director research at Chase Securities, stated, “After a healthy correction last week, the market has experienced fresh inflows today.”

He attributed the primary reason behind the climb to be the “sharp decline in fixed income yields over the past six months, making equities an increasingly attractive option”.

“While valuations remain reasonable, they are not as cheap as they were last year. We anticipate that future interest rate declines will be slower, shifting the market’s focus more toward earnings growth than rerating,” he added.

He eloborated that gradual rerating could encourage more companies to list on the stock market, which would significantly boost retail participation, citing examples of Mexico and India, which witnessed growth in retail over the past five years.

However, he countered that Pakistan had previously struggled attracting significant retail interest, despite having the necessary technology.

“As the market rerates and investor confidence improves, we believe this could change, leading to greater retail participation and fueling the ongoing market rally,” he said.

AKD Securities, a brokerage firm, in its report stated that the “KSE-100 is expected to continue its upward trajectory in CY25, despite strong performance over the last two years, given the decline in interest rates to single digits.”

The report said that firm anticipated the index to reach 165,215 by December 2025, posting a robust return of 55.5pc — primarily driven by the strong profitability of fertiliser companies, improving cash flows of exploration and production and Oil Marketing Companies (OMCs), and higher sustainable return on equity (ROE) of banks.

“We have overweight stance on Banks, E&P, Fertiliser, Cement, OMCs, Autos, Textile and Technology as we expect these sectors to be the beneficiary of monetary easing, structural reforms and declining commodity prices,” it highlighted.

The report noted its top picks to be Oil & Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL), MCB Bank, Meezan Bank Limited (MEBL), Habib Bank Limited (HBL), Fauji Fertiliser Company Limited (FFC), ENGRO, Pakistan State Oil (PSO), Lucky Cement Limited (LUCK), Fauji Cement Company Limited (FCCL), Indus Motor Company (INDU) and Systems Limited (SYS).

Last week, bears had dominated the trade floor shares declined by nearly 3,800 points, two days after the State Bank of Pakistan (SBP) cautiously eased the interest rate to 13pc, reiterating that core inflation, which stood at 9.7pc, was “proving to be sticky, whereas inflation expectations of consumers and businesses remain volatile”.