The Pakistan Stock Exchange (PSX) continued its bullish trend on Monday, with the benchmark KSE-100 Index posting a significant gain of nearly 1,000 points. By the close, the index settled at 114,230.06, reflecting an increase of 982.77 points or 0.87%.
Positive sentiment drove buying activity in several key sectors, including automobile assemblers, cement, chemical, commercial banks, fertilizer, power generation, and oil and gas exploration companies. Major stocks such as HUBCO, SSGC, SHEL, PSO, PPL, POL, ENGRO, HBL, MEBL, UBL, and NBP performed well, trading in the green.
According to a note from Intermarket Securities, “The market will now anticipate the upcoming Monetary Policy Committee (MPC) meeting, where consensus expectations suggest a 100 basis points (bps) reduction in the policy rate to 12%. This could potentially mark the end of the current easing cycle in the near term.” The note also highlighted the forthcoming results season, where strong payouts from banks could boost investor sentiment, although cyclical sector results may underwhelm.
Last week, the PSX faced heavy selling pressure, with the KSE-100 Index plunging by 4,339.69 points on a week-on-week basis, closing at 113,247.29 points. Investors opted to liquidate holdings amid prevailing market uncertainties.
Global Market Updates
On the global front, Asian equities slipped on Monday while the dollar hovered near 14-month highs. A robust U.S. payrolls report pushed bond yields upward and posed challenges to equity valuations as the earnings season begins.
Market expectations for Federal Reserve rate cuts in 2025 have reduced to just 27 basis points, with the terminal rate now projected around 4.0%, a sharp contrast to last year’s expectations of 3.0%. Five Federal Reserve officials are scheduled to speak this week, with New York Fed President John Williams’ comments on Wednesday being particularly anticipated.
The hawkish stance on rates lifted the yield on 10-year U.S. Treasuries to a 14-month high of 4.79%, last seen trading at 4.764% in Asian markets. Meanwhile, thin trading prevailed due to a public holiday in Japan. The MSCI Asia-Pacific shares index (excluding Japan) edged down 0.4%, and Nikkei futures fell to 38,770 compared to the cash close of 39,190.
