PSX KSE-100 closes above 79,000 amid cement sector rally

KARACHI: The Pakistan Stock Exchange (PSX) witnessed a bullish session as the KSE-100 index gained 671.73 points, closing at 79,335.59 on strong participation from the cement sector.

The 0.85% increase marks a positive outlook for the PSX, with intraday highs reaching 79,335.59 points. Key contributors included EFERT (+2.99%), UBL (+1.93%), and BAFL (+5.46%), along with notable performances from cement stocks such as DGKC (+2.15%) and LUCK (+2.64%).

Analysts at Arif Habib Commodities attributed the rally to upbeat data on remittances and optimism over the upcoming State Bank policy announcement on September 12.

Ahsan Mehanti, CEO of Arif Habib Commodities, pointed out that the $2.9 billion surge in remittances, which grew 40% year-on-year in August 2024, played a pivotal role in bolstering investor confidence. Additionally, the finance minister’s commitment to institutional reforms under the new IMF program further strengthened sentiment at Pakistan Stock.

Speculations surrounding the State Bank of Pakistan’s (SBP) key policy rate announcement also contributed to the positive momentum. Market players expect a possible 150 basis point interest rate cut, as inflation trends ease and economic activity remains subdued.

Cement stocks were a major driving force, with sector leaders like DG Khan Cement (DGKC), Fauji Cement (FCCL), and Lucky Cement (LUCK) contributing significantly to the index’s rise. AHL Research said that the move past 79,000 points is a bullish signal, with the next target level set at 80,000, supported by a solid base at 78,000.

Despite the positive momentum, some market analysts remain cautious, citing potential volatility in the near term. AKD Securities said that while the index is currently 12.6% above its 200-period moving average, low volatility may soon give way to sharp fluctuations. The technical outlook suggests that initial support for the index lies at 78,450 points, with further weakness possible if it breaks below this level.

However, resistance is anticipated near 79,100 to 79,400 points if the market continues its upward trajectory.

The broader economic environment remains mixed. While strong remittances and improving exports provide a positive backdrop, challenges such as weak cotton arrivals and sluggish economic activity—evident in declining petroleum and cement dispatches—could weigh on future growth.

Overall, the market’s direction in the coming sessions will largely hinge on the SBP’s policy decision, with any unexpected changes likely to spur additional volatility. For now, the cement sector’s performance and speculation over interest rate cuts remain the key catalysts driving investor sentiment.