KSE-100 Surges Over 1.5% Amid Progress on Government Formation

Following a period of pessimism, optimistic sentiment made a comeback at the Pakistan Stock Exchange (PSX) as the KSE-100 index recorded a notable gain of over 1.5% on Wednesday.

Throughout the trading session, the benchmark index reached an intra-day peak of 62,432.25, marking an increase of more than 1,205 points.

As the day concluded, the KSE-100 index settled with a rise of 926.92 points or 1.51%, closing at the 62,153.84 level.

This positive momentum coincides with reports suggesting that Pakistan is making progress towards the formation of a new government, as several political parties express their intention to collaborate. Former allies, including Pakistan Muslim League-Nawaz (PML-N), Pakistan Peoples Party (PPP), Muttahida Qaumi Movement-Pakistan (MQM-P), and others, declared their plans to establish a coalition government and extended an invitation to Pakistan Tehreek-e-Insaf (PTI) to engage in a "reconciliation" process for the benefit of the nation.

In addition to political developments, Business Recorder reported that the Economic Coordination Committee (ECC) is likely to approve an increase in natural gas prices on Wednesday, effective from February 2024. Analysts anticipate favorable outcomes for Sui Southern Gas Company Ltd (SSGCL) and Sui Northern Gas Pipelines Ltd (SNGPL), the two public sector gas utility companies.

Tuesday witnessed a dramatic turnaround on the PSX, recovering from a steep drop of over 1,450 points in the opening minutes of trading. The initial decline was triggered by news that the International Monetary Fund (IMF) did not support the government's circular debt plan. Ultimately, the benchmark index settled at 61,226.93, reflecting an increase of 161.61 points or 0.26%.

Globally, Asian shares mirrored a negative trend from Wall Street on Wednesday, accompanied by a surge in the dollar and Treasury yields. This shift in the global market followed a US inflation report on Tuesday, revealing a 3.1% annual increase in the consumer price index (CPI), surpassing the anticipated 2.9% rise.

Conversely, the inter-bank market on Wednesday saw the rupee maintaining stability against the US dollar. Closing at 279.32 after a minimal decline of Re0.01 against the greenback, as reported by the State Bank of Pakistan.

Market activity saw a decline in volume on the all-share index, dropping to 303.8 million from 435.5 million in the previous session. The value of shares also decreased to Rs14.69 billion from Rs15.97 billion in the prior session.

Among the top performers in terms of volume were K-Electric Ltd with 33.4 million shares, Oil and Gas Development Company with 32.2 million shares, and Pak Petroleum with 15.5 million shares.

On Wednesday, a total of 342 companies traded, with 267 experiencing an increase, 56 recording a fall, and 19 remaining unchanged.