Stocks reached a new all-time high above 86,500 points on Wednesday as earnings season has reignited investor interest in index-heavy stocks, with positive sentiments stemming from the Shanghai Cooperation Organisation (SCO) summit and optimism for political stability.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index surged 673 points to touch 86,513 in intraday trade as of 10:41am, up from yesterday’s close of 85,840 points.
The two-day meeting of the Council of Heads of Government (CHG) of the SCO kicked off in Islamabad on Tuesday amid hopes of a possible positive developments before it ends today.
Reacting to the early bull-run, Khurram Schehzad, CEO of Alpha Beta Core, stated, “Successfully organising a major global event like SCO summit, bringing together regional leaders, especially the arrival of Indian external affairs minister, must have further strengthened investor confidence.”
Indian Foreign Minister Subrahmanyam Jaishankar arrived in Pakistan on Tuesday in the first such visit in almost a decade for the SCO meeting. It has been nearly a decade since a foreign minister from Pakistan’s arch-rival India has visited amid frosty relations between the two nuclear powers.
Stocks rebounded on Tuesday, closing 579 points higher, boosted by positive earnings outlook and optimism surrounding the Shanghai Cooperation Organisation (SCO) summit in Islamabad.
Saad Ali, Director of Research at Intermarket Securities, informed private news channel that investor sentiment strengthened after headway on the highly-contested government-proposed bill, and the perceived low likelihood of PTI protests in Islamabad.
“The market has also digested and priced in the negative impact of termination/modification of PPAs of old IPPs,” Ali added.
Ahsan Mehanti at Arif Habib Corporation, in conversation with private news channel, said that stocks rallied as investors considered reduced political uncertainty and economic gains from the SCO summit.
“A decline in bond yields and the government’s discussions about privatising state-owned enterprises contributed to the bullish activity in PSX,” Mehanti added.
The meeting of the SCO, a Eurasian security and political group formed in 2001 by Russia and China, is the highest-profile event hosted by the South Asian nation in years