It is anticipated that PSX will exhibit a robust upward trend on Thursday.
On Thursday, the Pakistan Stock Exchange (PSX) underwent a robust rebound as the bulls regained control, resulting in a market increase of over 500 points during intraday trading. This resurgence is a direct consequence of a brief reversal earlier in the week, during which the PSX temporarily halted its impressive upward trajectory.
The benchmark KSE-100 Index is on the rise as the market recovers.
On Thursday, the benchmark KSE-100 index rose by 548.58 points, or 0.59%, to 93,904.00 by approximately 11 a.m. from its previous close of 93,355.42. Following a modest recovery of 131 points on Wednesday, the recent increase has reignited investor interest, which has been fuelled by a combination of value-seeking behavior among market participants and attractive valuations.
Investors are shifting from fixed-income investments to equities, as per a market expert.
According to Yousuf M. Farooq, Director of Research at Chase Securities, the increase is the result of a substantial shift among investors who are withdrawing from fixed-income mutual funds as returns in that sector decrease. Although he acknowledged that this transition is accompanied by consistently stable macroeconomic indicators, he also suggested that specific tax policy modifications may be necessary to accomplish future fiscal objectives..
Additionally, Farooq identified beneficial indicators in the broader economy, such as a decrease in circular debt growth and an increase in sales in sectors such as fast-moving consumer goods (FMCGs), automobiles, and motorcycles. Additionally, he noted a resurgence in the property market, as buyers felt a sense of urgency to prevent missing out on any opportunities.
It is recommended that investors exercise caution when approaching significant rallies.
Despite his optimism, Farooq urges caution, emphasizing that even the most robust rallies can occasionally lead to short-term corrections. He emphasized the significance of equities as long-term investments and recommended that investors enter the market with a well-defined strategy and avoid using funds that may be needed in the immediate future.
The attractive valuations of AKD Securities are the reason why investors are drawn to PSX.
Awais Ashraf, Director of Research at AKD Securities, reiterated this sentiment, attributing the rekindled interest in equities to the KSE-100 index’s favorable valuation. The positive sentiment, according to Ashraf, has been influenced by the declining yields in fixed-income assets and commodity pricing, as well as the improvement of economic indicators.
Ashraf underscored that Pakistan’s capacity to negotiate more flexible terms with the International Monetary Fund (IMF) was advantageous as a result of its controlled current account and stronger fiscal outlook, which further bolstered investor confidence.
A Bright Future as PSX Expands
The PSX is anticipated to continue on its current trajectory due to the heightened interest in equities and the reinforcement of macroeconomic stability. However, it is recommended that investors exercise caution and maintain a long-term perspective as they navigate the market’s evolving dynamics, according to experts.
