Pakistan Stock Exchange (PSX) surged nearly 3,000 points in the last week in a rally spurred by an agreement among major political parties to form a coalition government, which largely addressed the political instability that had prevailed since elections in early February.
At the beginning of the week, the bourse witnessed a notable recovery from the losses incurred last week, driven by investor optimism about a breakthrough in negotiations for installing a coalition government.
Next day, the KSE-100 index failed to protect Monday’s gains as uncertainty prevailed because of the emerging political scenario.
Stocks bounced back on Wednesday with the easing of political concerns following an agreement among major parties on forming the next government.
The following day, the KSE-100 index extended gains and closed near the 62,000-point mark, buoyed by optimism about a power-sharing deal among political parties.
On Friday, the market reflected growing economic stability and investor confidence, which emerged as major influencing factors when political uncertainty died down, leading to a surge of around 900 points.
Overall, the benchmark KSE-100 index rose 2,943 points, or 4.92% week-on-week (WoW), and settled at 62,815.82. JS Global analyst Muhammad Waqas Ghani, in his review, noted that the KSE-100 index gained 5% following an agreement among political parties to press ahead with the formation of a coalition government led by the PML-N.
Average volumes, however, decreased 3% WoW to 338 million shares per day. Pakistan’s dollar bond prices jumped in the range of 1-6% after the two major political parties reached an agreement on forming the next government, he said.
Meanwhile, the current account returned to the red zone in January 2024 with a deficit of $269 million, which took 7MFY24 deficit to $1.1 billion. The $700 million current account gap was broadly led by a higher trade deficit that went up $600 million month-on-month (MoM).
