Despite worries about extensive flooding in Punjab and an impending super flood in Sindh,equity investors continued their buying activity on Tuesday, propelling the Pakistan Stock Exchange (PSX) to a new record high.

The KSE-100 index, a key market indicator, approached the 151,000-point level, marking its third consecutive session of gains.

the index increased by as much as 1,105 points during the day before closing at 150,975, a rise of 1,004 points or 0.67pc. According to Topline securities, critically important contributions came from Engro Holdings, Fauji Fertiliser, Engro Fertiliser, Bank Al-Habib, and Bank Alfalah, which together added 938 points to the overall increase.

Factors behind the Surge

Ahsan Mehanti of Arif Habib Corporation credited the positive market performance to a combination of favorable economic indicators, including increased foreign exchange reserves, a decrease in consumer inflation to 3pc year-on-year, a 7pc year-on-year increase in oil sales for August, and anticipated government spending on post-flood reconstruction.

“The market’s northbound trajectory remained intact, with investor focus shifting towards the fertiliser sector.” – ali Najib, Arif Habib Ltd

Ali Najib, Deputy Head of Trading at Arif Habib ltd, noted that “the market’s northbound trajectory remained intact,” with investors increasingly focused on the fertilizer sector. This shift is driven by expectations of a government-supported farmer relief package in response to crop damage caused by the recent floods.

He added that increased demand for urea and DAP, aimed at revitalizing soil fertility, coudl help fertilizer manufacturers reduce excess inventories accumulated in previous quarters.

Pakistan’s trade deficit saw improvement, narrowing to $2.86bn in August from $3.1bn in July. This indicates reduced import pressures and relatively stable exports, signaling positive momentum for external sector stability.

Market Activity and Analysis

Despite the positive market sentiment, overall trading activity decreased. Total trading volume fell by 8.62pc to 1.08bn shares, while traded value decreased by 9.05pc to Rs44.24bn. The Bank of Punjab remained the most actively traded stock for the third consecutive day, with 174.3 million shares traded,highlighting strong investor interest as the market anticipates further record-breaking sessions.

Analysts suggest that the 150,000 mark has now become a strong support level, bolstered by decreasing trade deficits and growing optimism regarding relief measures for the agriculture sector.

With strong momentum and healthy liquidity, the PSX is expected to reach new highs in the coming sessions.