Stocks hit new high on economic optimism

KARACHI: Stocks reached a new high after the benchmark KSE-100 index crossed the 72,000 mark during early morning trading on Wednesday.

The index gained 976.49 points or 1.37 per cent during the intraday trading to reach 72,335.89 points, up from the previous close of 71,359.41 points.Raza Jafferi, the CEO of EFG Hermes Pakistan, told Geo.tv that the gain was due to the improvement in the economic metrics, especially in foreign exchange reserves and inflation trajectory, which were giving rise to monetary easing expectations.

“This can be a major trigger for equities, and is leading to interest in highly leveraged sectors such as cement and textile which are driving the newest leg of the rally,” said Jafferi.Topline Securities CEO Muhammad Sohail told Geo News that the KSE-100 index set another record. He said consumer inflation was expected to decrease after a record current account surplus.

“Investors believe that the interest rate will decrease in the coming months,” added Sohail.A day earlier, stocks ended slightly lower in mixed trade as early gains driven by a rally in the cement sector were erased by profit-taking in the later session, traders said. The KSE 100-share index fell by 74.06 points or 0.10 per cent to close at 71,359.41 points. “Stocks closed under pressure amid higher trades on weak global crude oil prices, reports over refineries shutdown and expectations over prudent SBP policy announcement next week ahead of new IMF loan talks next month,” said analyst Ahsan Mehanti at Arif Habib.

“Shanghai Electric Power’s withdrawal on KE acquisition offer, uncertainty over Pakistan-US relations on Pakistan-Iran trade pacts and weak rupee played a catalytic role in the negative close.”