The Pakistan Stock Exchange (PSX) witnessed a dramatic turnaround on Wednesday, surging nearly 2% thanks to a late-hour buying spree and positive news on the political front. The benchmark KSE-100 index closed at a staggering 61,559.16 points, marking a gain of 1,094.91 points or 1.81% from the previous day.
This remarkable upswing was primarily attributed to the formation of a new coalition government between the Pakistan Muslim League-Nawaz (PML-N) and the Pakistan Peoples Party (PPP). This agreement, reached after weeks of negotiations, brought much-needed clarity and stability to the political landscape, boosting investor confidence.
The day started with a strong buying rally triggered by the news of the government’s formation. However, the market took a breather in the afternoon, leading to a dip in the index. Nevertheless, the positive sentiment prevailed, and last-minute buying pushed the index back up, culminating in a significant closing gain.
It’s important to note that this surge in Pakistani stocks contrasted with the overall trend in Asian markets, which were subdued due to concerns over global interest rates. The MSCI Asia ex-Japan index, for instance, dipped slightly on Wednesday.
While the market reacted positively to the formation of a new government, it’s crucial to monitor the long-term impact of their policies on the economy and the stock market. Additionally, the global economic outlook, particularly with regard to interest rates, could influence future market movements.
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