PSX Records Second Largest Single-Day Surge

Pakistan Stock Exchange Records Second Largest Single-Day Surge

The Pakistan Stock Exchange (PSX) witnessed an extraordinary recovery, with the KSE-100 Index soaring by over 4,400 points on December 23, 2024. This remarkable rise marks the second-largest single-day increase in the market’s history, signaling renewed investor confidence and economic optimism.

Market Overview

The KSE-100 Index closed at an impressive 113,924.41 points, surging by 4.03% from the previous session’s close of 109,513.14 points. This follows a week of volatility where the market saw a 9,000-point decline. Friday’s recovery paved the way for this historic leap, driven by key economic and political developments.

Catalysts Behind the Surge

Political Stability: The much-anticipated dialogue between the Pakistan Tehreek-e-Insaf (PTI) and the government contributed significantly to the market’s bullish momentum. Positive outcomes from these discussions have eased political tensions.
Economic Indicators: A significant boost came from upbeat economic metrics:
- Exports and remittances surged, improving foreign exchange reserves.
- Pakistan reported a $729 million current account surplus for November 2024, a stark contrast to the $148 million deficit in November 2023.
Interest Rate Cuts: The State Bank of Pakistan’s decision to reduce the policy rate to 13%, following a 200bps cut, has redirected liquidity towards equities.
Sectoral Performance: Across-the-board scrips led the surge. Stable yields on government paper and falling lending rates further reinforced market sentiment.

Additional Economic Highlights

Large-scale manufacturing showed signs of recovery, with a modest 0.02% YoY increase in November.
Foreign direct investment (FDI) rose by 65% MoM and 27% YoY in November, reaching $219 million.
Pakistan’s power generation grew by 6% YoY, clocking in at 8,032 GWh.
The government secured a $330 million loan agreement with the Asian Development Bank (ADB) to bolster social protection measures.

Outlook

Analysts remain optimistic about sustained growth, citing renewed confidence among high net-worth individuals and mutual funds. With further negotiations between political parties and robust economic policies, the PSX appears poised for continued momentum.