PSX: Buying at bourse, KSE-100 settles with modest gains

Buying interest was observed at the Pakistan Stock Exchange (PSX), with the benchmark KSE-100 Index settling with a gain of over 350 points on Wednesday.

The benchmark index initially moved higher, climbing to an intraday high of 171,492.52 during the opening hours of trading, indicating strong buying interest.

However, the early gains were gradually eroded as the session progressed, with the index moving largely sideways around the 171,000 level through midday before coming under renewed selling pressure.

The market remained under pressure during the second half, with the KSE-100 steadily declining and touching an intraday low of 169,872.13 near the end.

At close, the benchmark index settled at 169,969.32, up 368.92 points or 0.22%.

In a key development, the Ministry of Finance (MoF) on Tuesday unveiled a Strategic Action Plan for Pakistan’s Local Currency Bond Market (LCBM) under its International Monetary Fund (IMF)-supported programme pledge to address market bottlenecks, while targeting deeper secondary-market liquidity, a broader investor base, more predictable government borrowing and reforms to the legal, tax and financial-market infrastructure governing rupee-denominated securities.

On Tuesday, the PSX came under renewed selling pressure as rising global crude prices and persistent Middle East geopolitical tensions triggered a late-session sell-off, pushing the benchmark KSE-100 Index below the 170,000-point level. The index fell 825.22 points, or 0.48%, to close at 169,600.41 points.

Internationally, global bonds wobbled on Wednesday and were set for their worst month in years, hit by a toxic mix of ​deteriorating government finances, a glut of issuances and rising inflation as the seven-month-old US-Israeli war on Iran keeps energy costs elevated.

Meanwhile, stocks fared ‌better, largely unfazed by the surge in bond yields and were upbeat in Asia.

The rise in borrowing costs has been front-and-centre for investors, given that sovereign yields are an anchor for global markets, a reference price for investing in riskier stocks and a benchmark for mortgages and corporate borrowing.

While a persistently higher risk-free rate increases the cost of refinancing for companies and weighs on growth, its impact on stocks has ​thus far been relatively limited.

MSCI’s broadest index of Asia-Pacific shares excluding Japan rose 0.2% in early trading and was on track for a monthly fall of just ​over 1%.

Japan’s Nikkei rose 0.9% and was set to end the month little changed, while South Korea’s Kospi was headed for a monthly gain of 1.4%.