Stocks zoomed past the 90,000-point mark in early trade before settling a few notches below the historic psychological barrier, buoyed by robust economic indicators and stabilising fundamentals amid hopes for an extension of the hawkish monetary regime by the central bank.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Shares Index gained 1047.98 points or 1.18% to close at 89,993.96 points aftering hitting a day high of 90,593.61 points.
Commenting on the 90,000 barrier breach, Arif Habib Limited’s (AHL) Head of Research Tahir Abbas told Geo.tv that the market’s overall momentum was positive.
“If you look at the economic indicators like remittances, current account, etc, they are improving, which is affecting the market positively,” the analyst said.
He noted that, with inflation on a downward trajectory, the interest rate was expected to see a further cut of 2% to 2.5% in the upcoming monetary policy meeting on November 4, 2024.
“Even though stocks have been rallying for some time, valuations are still attractive and cheap, while the market is trading at a price-to-earnings ratio of 4.2x, while its six-year average is around 6x,” Abbas said.
The analyst further said that there was an ample flow of liquidity in the stocks, and since fixed-income investments were not offering solid returns, investors were entering the equities market. “This shift is driving value buying in the market,” he added.
