Stocks hit record as ADB loan fuels rally
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The Pakistan Stock Exchange (PSX) on Tuesday soared to an all-time high above 120,000 points as investor optimism grew following a string of positive economic developments.
The approval of a $800 million loan by the Asian Development Bank (ADB) for Pakistan's public finance programme and the government's approval of a Rs880 billion Public Sector Development Programme (PSDP) bolstered market sentiment.
The KSE-100 index surged to the intra-day high of 1,816 points, before closing the day with an increase of 1,573 points at 120,451. Commercial bank, fertiliser and cyclical stocks led to broad-based gains while higher trading volumes, which reached 578 million shares, reflected renewed investor confidence.
According to Ahsan Mehanti of Arif Habib Corp, stocks closed at an all-time high, led by across-the-board activity, after the ADB approved a $800 million financing package. Additionally, the government set the FY26 growth target at 4.2% and approved Rs880 billion for the PSDP.
Mehanti added that budgetary relief was expected to be announced for oil refineries, real estate and the agricultural sector. This, alongside the rupee appreciation, played the role of catalyst in bullish close at the PSX.
At the end of trading, the benchmark KSE-100 index recorded an increase of 1,573.07 points, or 1.32%, and settled at 120,450.87.
In its review, Topline Securities commented that bulls maintained their firm grip on the market, propelling the KSE-100 index to a record close at 120,451, supported by renewed investor confidence and an improving macroeconomic outlook.
The index surged to the intra-day high of 1,816 points as momentum picked up sharply after news broke that the ADB had approved a $800 million loan under Pakistan's public finance programme – a major vote of confidence in the country's economic reform trajectory.
Adding fuel to the rally, the International Monetary Fund (IMF) gave its nod to Pakistan's budget proposals, reinforcing hopes of continued fiscal discipline and policy continuity, Topline said.
Driving Tuesday's rally were key index movers including Fauji Fertiliser Company, HBL, Engro Fertilisers, Lucky Cement and Bank AL Habib, which contributed 691 points, it added. In its commentary, Arif Habib Limited (AHL) remarked that the KSE-100 index unlocked 120,000 points at close on Monday, which bodes well for further upside during the remaining week.
Some 65 shares rose while 31 fell, with Fauji Fertiliser Company (+1.79%), HBL (+5.19%) and Engro Fertilisers (+3.56%) contributing the most to index gains. On the flip side, Systems Limited (-0.84%), Service Industries (-1.55%) and Haleon Pakistan (-2.32%) were the biggest drags, it said.
AHL also mentioned that the ADB approved $800 million for Pakistan's public finance programme aimed at strengthening fiscal sustainability and improving financial management.
Meanwhile, the anti-trust body fined fertiliser makers for fixing a higher sale price, which adversely impacted farmers. "Holding 120k will allow the KSE-100 to extend gains towards 125k," it projected.
JS Global analyst Mubashir Anis Naviwala said that the benchmark index surged throughout the day and reached a historic high at 120,451 points. Buying interest was witnessed across commercial banks, fertiliser and cyclical stocks, driving broad-based gains, he said.
"With the index at the all-time high, a breakout could lead to fresh momentum and attract further institutional participation. We recommend investors to capitalise on this and invest in fundamentally strong stocks in the fertiliser, cement and banking sectors on any intra-day pullbacks," Naviwala stated.
Overall trading volumes increased to 578.2 million shares compared with Monday's tally of 497.9 million. The value of shares traded was Rs26.8 billion.
Shares of 467 companies were traded. Of these, 232 stocks closed higher, 187 fell and 48 remained unchanged.
K-Electric was the volume leader with trading in 144.6 million shares, gaining Rs0.23 to close at Rs5.32. It was followed by Faysal Bank with 26.7 million shares, gaining Rs4.89 to close at Rs53.77 and Invest Bank with 25.5 million shares, gaining Rs0.04 to close at Rs2.35. Foreign investors sold shares worth Rs956 million, the National Clearing Company reported.
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