PSX
Shares at the Pakistan Stock Exchange (PSX) saw an impressive recovery on Wednesday, climbing by more than 4,600 points, marking its highest-ever single-day gain. This surge came just a day after the market experienced a significant sell-off due to political unrest in the country.
The dramatic turnaround in the market was driven by the resolution of street confrontations between Pakistan Tehreek-e-Insaf (PTI) protesters and law enforcement agencies in Islamabad, following a large-scale operation by the authorities.
The stabilization of the situation, coupled with investor optimism, played a pivotal role in the market’s rebound.
The benchmark KSE-100 Index started the day with a notable increase of 3,275.22 points, or 3.46 percent, reaching 97,849.38 points by 9:43 a.m., up from the previous close of 94,574.16. By 1 p.m., the index had risen by 3,702.62 points, reaching 98,276.78 points, signaling a strong recovery.
By the end of the trading session, the index had surged by an astounding 4,695.09 points, or 4.96 percent, closing at 99,269.25 points.
The index was on the verge of hitting the 100,000 mark, a milestone that could be reached in the coming sessions if the market continues its upward trajectory.
Mohammed Sohail, CEO of Topline Securities, highlighted that the recovery came as investor concerns about PTI protests subsided.
He pointed out that the market’s rebound was remarkable, with the KSE-100 index marking its highest-ever single-day rise, just a day after experiencing its largest drop.
Yousuf M. Farooq, Director of Research at Chase Securities, also commented on the market’s recovery, attributing it to the government’s success in dispersing the protestors.
He noted that attention had shifted back to economic fundamentals, including declining interest rates and earnings growth, which provided a positive outlook for the market.
Awais Ashraf, Director of Research at AKD Securities, shared a similar view, stating that the decline in political uncertainty had rejuvenated investor confidence.
He also emphasized that improving macroeconomic indicators and lower fixed-income yields were contributing to a bullish market trend.
Ashraf predicted that equities would continue to perform well, supported by subdued commodity prices and an undervalued index compared to both historical averages and regional peers.
Despite challenges like the recent implementation of a Minimum Deposit Rate by the State Bank of Pakistan for Islamic banks, retail investors are encouraged to look beyond short-term fluctuations.
They are advised to focus on long-term investment strategies, buying shares in established Pakistani companies with a history of steady earnings growth and dividends.
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