Stock Market Rebounds as Economic Factors Boost Investor Confidence

The stock market experienced a resurgence on Thursday, recovering from the losses of the previous day. Investor sentiment was lifted by positive economic indicators, including Fitch’s recent credit rating upgrade for Pakistan and the decline in global oil prices.

The Pakistan Stock Exchange’s (PSX) KSE-100 Index reached a peak of 117,216.02 during intraday trading, marking an increase of 1,195.92 points, or 1.03%, compared to the previous day’s closing figure of 116,020.10. The lowest point of the session was 115,818.07, a slight decrease of 202.03 points, or 0.17%.

According to Ahfaz Mustafa, CEO of Ismail Iqbal Securities, the markets are reacting favorably to several developments, including the upgrade from Fitch, the resolution of circular debt issues, and a significant reduction in oil prices.

He further noted that the drop in oil prices, expectations of moderate inflation, and tax relief on real estate transactions are contributing to the positive market sentiment.

Investor confidence was strengthened by Fitch Ratings’ decision earlier in the week to raise Pakistan’s long-term foreign-currency issuer default rating to ‘B-‘ from ‘CCC+’, with a stable outlook. Fitch cited improvements in fiscal consolidation, a stabilizing external account, and enhanced macroeconomic management under the current IMF program.

Macroeconomic sentiment was also boosted by the consumer price index data for March, which revealed that inflation had slowed to 0.69%, the lowest monthly figure in more than seven years.

Adding to the positive economic outlook, the government successfully raised Rs965 billion through the auction of Market Treasury Bills (T-bills) on Wednesday, surpassing its target of Rs850 billion.

Cut-off yields saw a slight decrease on one-month and six-month tenors, while remaining stable for other tenors. In addition, Rs261 billion was raised through Pakistan Investment Bonds (floaters), against a target of Rs400 billion.

State Bank of Pakistan (SBP) Governor Jameel Ahmad had earlier expressed optimism that the recent decrease in oil prices would help offset the effects of reciprocal US tariffs.

Last week, the US President had announced a 90-day suspension of new tariff measures, allowing room for negotiations after initially imposing 29% duties on Pakistani exports.

On Wednesday, the PSX had ended its two-day upward trend, declining by 755.4 points, or 0.65%, to close at 116,020.11.