Bourse Recovers as Investor Sentiment Boosted by Economic Factors

The stock market experienced a resurgence on Thursday, effectively reversing the losses incurred during the prior session. This rebound was largely attributed to positive investor reactions to encouraging economic signals, notably Fitch’s credit rating upgrade for Pakistan and the decline in global oil prices.

The Pakistan Stock Exchange (PSX) KSE-100 Index concluded trading at 116,901.13, reflecting an increase of 881.03 points, which translates to a 0.76% rise from the previous closing figure of 116,020.10.

During the trading day, the index peaked at 117,216.02, demonstrating a significant gain of 1,195.92 points or 1.03%. The day’s lowest point was recorded at 115,818.07, a slight decrease of 202.03 points or 0.17%.

Ahfaz Mustafa, CEO of Ismail Iqbal Securities, commented, “The markets are responding favorably to several developments, including the upgrade from Fitch, the settlement of circular debt issues, and a substantial reduction in oil prices.”

He further stated, “The drop in oil prices, expectations for controlled inflation, and tax benefits on property transactions are collectively contributing to a positive market outlook.”

Investor morale was notably strengthened by Fitch Ratings’ recent decision to revise Pakistan’s long-term foreign-currency issuer default rating upwards to ‘B-’ from ‘CCC+’, accompanied by a stable outlook. This upgrade reflects improved fiscal management, a more stable external account, and enhanced macroeconomic governance under the existing IMF program.

The overall macroeconomic outlook was further bolstered by the consumer price index data for March, which revealed a slowdown in inflation to 0.69%, marking the lowest monthly figure in over seven years.

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

There was a slight decrease in cut-off yields for one-month and six-month tenors, while rates remained stable for other durations. In addition, Rs261 billion was secured through Pakistan Investment Bonds (floaters), against a projected Rs400 billion.

Earlier in the week, State Bank of Pakistan (SBP) Governor Jameel Ahmad voiced optimism that the recent decrease in oil prices would help mitigate the effects of reciprocal tariffs imposed by the US.

Last week, US President Donald Trump declared a temporary 90-day suspension of new tariff measures to allow for negotiations, following the earlier implementation of 29% duties on Pakistani exports.

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