Bulls return to PSX after credit rating lift, oil price drop

The stock market staged a strong recovery on Thursday, as improved macroeconomic indicators and easing global pressures helped restore investor confidence.

The positive sentiment was boosted by a credit rating upgrade from Fitch and falling global oil prices.

The Pakistan Stock Exchange's (PSX) benchmark KSE-100 Index closed at 116,901.13, up 881.03 points, or 0.76%, from the previous close of 116,020.10.

The index hit an intraday high of 117,216.02, marking a gain of 1,195.92 points, or 1.03%. The session’s low was recorded at 115,818.07, representing a modest dip of 202.03 points, or 0.17%.

“Markets are cheering various news, including the upgrade from Fitch, the resolution of circular debt and a large drop in oil prices," said Ahfaz Mustafa, CEO of Ismail Iqbal Securities.

"The oil prices decline and the expectations of subdued inflation, coupled with taxation relief on real estate transactions, are all leading to positive sentiment,” he added.

Investor confidence was buoyed by Fitch Ratings' decision earlier this week to upgrade Pakistan’s long-term foreign-currency issuer default rating to ‘B-’ from ‘CCC+’, with a stable outlook. The agency cited improved fiscal consolidation, a stabilising external account, and stronger macroeconomic management under the ongoing IMF programme.

Macroeconomic sentiment was further lifted by March’s consumer price index data, which showed inflation slowing to 0.69%, the lowest monthly reading in over seven years.

In a further sign of improving economic sentiment, the government successfully raised Rs965 billion through the auction of Market Treasury Bills (T-bills) on Wednesday, exceeding its target of Rs850 billion.

Cut-off yields declined slightly on one-month and six-month tenors, while remaining flat for others. Additionally, Rs261 billion was raised via Pakistan Investment Bonds (floaters) against a target of Rs400 billion.

State Bank of Pakistan (SBP) Governor Jameel Ahmad, earlier this week, expressed optimism that the recent fall in oil prices would help offset the impact of reciprocal US tariffs.

Last week, US President Donald Trump announced a 90-day pause on new tariff measures, offering space for negotiations after earlier imposing 29% duties on Pakistani exports.

On Wednesday, the PSX had ended its two-day winning streak, falling by 755.4 points or 0.65% to close at 116,020.11.