Market optimism surged following the government’s announcement of significant reductions in fuel prices, with petrol and high-speed diesel seeing declines of Rs8 and Rs11 per liter, respectively, for the upcoming two weeks. This favorable sentiment aligned with the ongoing weeks-long rally of the Pakistani rupee, which appreciated by Rs1.06, reaching 286.68 against the US dollar during morning trade, based on data from the Forex Association of Pakistan.
At 12:20 pm, the market index rapidly climbed to 46,683.13 points, marking a substantial increase of 450.54 points or 0.97% compared to the previous closing level of 46,232.59 points.
Prominent analysts provided insights into these developments:
Raza Jafri, who serves as the head of equity at Intermarket Securities, underlined the positive response in the market, attributing it to a continued focus on the economy by key stakeholders. He pointed out that the market might prioritize an improved outlook over a potentially high Consumer Price Index (CPI) reading for September.
Syed Faran Rizvi, heading equity sales at JS Global Capital, emphasized that the equity market’s favorable momentum was sustained due to reduced costs of petroleum oil and lubricants (POL products) and the strengthening of the Pakistani Rupee (PKR). He also noted that future investor sentiment could hinge on the upcoming IMF review and the actions taken within the energy sector.
Ahsan Mehanti, who serves as the chief executive of Arif Habib Commodities, identified the primary drivers behind the bullish market activity. These factors encompassed the anticipation of IMF review meetings for the release of the next tranche and a positive growth outlook. Moreover, the buoyant data across various sectors in September 2023, including crop output, cotton production, power generation, fertilizer, automotive, POL, and cement sales, combined with the PKR’s recovery and government considerations regarding the privatization of state-owned enterprises, have collectively fueled optimism in the market.
