KEY POINTS
- KSE-100 and All Shares Index post moderate gains with orgindary volume of trade.
- Political clarity and IMF prospects boost foreign investor sentiment.
- Inflation at 6.2% and geopolitical risks temper global investor enthusiasm.
- Recovery momentum is dependent on IMF progress, economic reforms, and sector valuations.
ISLAMABAD: The Pakistan Stock Exchange (PSX) posted a moderate recovery last week, driven by political clarity and optimism over IMF support, reflecting cautious, still improving investor sentiment.
Market Performance & Key Movements
The benchmark KSE-100 Index closed the week at 161,935 points, gaining 1,278 points, or 0.79 per cent, marking a rebound after three consecutive weeks of losses. The All Shares Index rose by 781 points to 97,990 points.
Trading volume totalled 673 million shares with a turnover value of PKR 34.65 billion during the closing session, according to the PSX data.
The banking sector led the gains, with the BKTI up 443 points to 44,511. Analysts reporting in The Express Tribune noted that renewed confidence followed the passage of the 27th Constitutional Amendment and anticipation of the IMF’s next loan tranche.
Dawn highlighted that the index rallied toward the end of the week, moving above critical technical levels after prior selling pressure.
Macroeconomic & Political Drivers
Political stability significantly bolstered market confidence, with the amendment’s passage increasing hopes for the return of foreign investment.
Nonetheless, broader risks persist, including geopolitical tensions and IMF programme uncertainty. Inflation remains elevated, with Reuters citing October consumer price inflation at 6.2 per cent, the highest in 12 months, potentially affecting risk appetite.
Local media noted that November just like October saw markets slip due to profit-taking and weak corporate earnings.
Market Sentiment & Outlook
Recovery momentum was supported by “value hunting,”, although analysts caution that sustained gains depend on IMF progress and continued political stability.
The KSE-100 remains below its long-term P/E average, offering potential for long-term investors, Dawn reported.
Risks to Watch
The IMF programme is critical; delays could impact market sentiment. Elevated inflation may compel the central bank to maintain tight monetary policy, according to Reuters. Geopolitical volatility continues to challenge investor confidence.
The PSX’s moderate rebound reflects a fragile but meaningful improvement in sentiment, driven by political clarity and IMF prospects. Sustained growth hinges on economic reforms, external financing, and policy stability.
