The Pakistan Stock Exchange (PSX) continued the upward trend the market is experiencing, crossing the 1,000 points mark on Tuesday, a day after annual inflation dropped to a six-and-a-half-year low of 4.9 per cent in November.
The benchmark KSE-100 index climbed 1084.31 points, or 1.05pc, to stand at 104,359.25 points from the previous close of 103,274.94 points at 2:47pm.
At around 10am, the index fell drastically by 449.35 going to a low of 102,825.59. However, as the day went on, the index soared, reaching the high of 104,445.80.
Yousuf M Farooq, Director of Research at Chase Securities, said the surge was continued by the positive news on the economic front, citing the 78-month low consumer price index in November and the release of trade deficit figures narrowing 19pc year-on-year to $1.589bn.
“The market is rerating upwards in anticipation of lower interest rates and stronger earnings growth in the future,” Farooq said while speaking to Dawn.com.
Farooq recommended that retail investors focus on long-term financial goals by ignoring short-term market fluctuations and consistently investing small amounts monthly into a diversified portfolio of companies that they understand.
On the other hand, AKD Securities Director Research Awais Ashraf, said: “Investors have grown more optimistic about the State Bank of Pakistan (SBP) continuing with monetary easing in the upcoming Monetary Policy Committee (MPC) meeting, following the release of inflation and trade data.”
Ashraf told Dawn.com that the November inflation rate of 4.9pc drove the real interest rates to over 10pc, signalling room for a potential rate cut.
“We recommend investors focus on sectors closely tied to structural reforms and monetary easing when constructing their portfolios,” he said.
