Bulls Dominate PSX, KSE-100 Settles With 1.8% Gain

A final-hour buying witnessed at the Pakistan Stock Exchange (PSX) pushed the benchmark KSE-100 index to settle with an increaseof nearly 1,100 points during trading on Wednesday.

During the day, clarity on the political front regarding the formation of a new government bolstered market sentiment at the bourse.

Mohammed Sohail, CEO of Topline Securities, in a note, earlier during the day, said the buying rally came “after news that two political parties reached agreement for government formation.”

In the second half of the trading session, the market resorted to profit-taking, dropping to an intra-day low of 60,906.98.

However, amid last-hour buying the benchmark index settled at 61,559.16 level, an increase of 1,094.91 points or 1.81%.

After several rounds of consultations, the major political parties — Pakistan Muslim League-Nawaz (PML-N) and Pakistan Peoples Party (PPP) — Tuesday, reached an agreement to form a coalition government in the Centre. The agreement comes nearly two weeks after general elections were held in the country.

As per reports, the understanding was reached in a meeting of the senior leadership of the two parties, including PML-N president Shehbaz Sharif and PPP chairman Bilawal Bhutto Zardari followed by a joint presser, which was also joined by PPP co-chairman Asif Ali Zardari and other senior leaders of the two parties late on Tuesday.

As per the understanding, Shehbaz Sharif will be the joint candidate for the prime minister and Asif Ali Zardari for the office of the president of Pakistan while the cabinet members will be finalised through consultations.

“We, the PPP and PML-N, have achieved the required number and we are in a position to form the government,” Bilawal told the presser.

Globally, Asian stocks eased on Wednesday as diminishing expectations of early interest rate cuts from the Federal Reserve sapped risk appetite, with investors looking to the minutes of the U.S. central bank’s last meeting for clues on the policy outlook.

MSCI’s broadest index of Asia-Pacific shares outside Japan, was 0.09% lower on Wednesday. Japan’s Nikkei eased 0.21%, having stuttered in the last few days within sight of the all-time high set in 1989.

China stocks were mixed in early trading, a day after the biggest-ever reduction in the nation’s benchmark mortgage rate as authorities stepped up efforts to prop up the struggling property market.

On Tuesday, despite initial gains, the PSX ended the trading session on a flat note, with KSE-100 settling at 60,464.24 with a gain of only 4.49 points or 0.01%.