The Pakistan Stock Exchange (PSX) achieved another milestone on Friday, crossing the 109,000-point mark for the first time. The KSE-100 Index rose by 1,239.12 points, or 1.14%, during intraday trading, reaching a peak of 109,478.08 points. This surge continues a record-breaking streak, coming just a week after the PSX surpassed the 100,000-point threshold.
The rally was driven by improving macroeconomic indicators, including a rise in Pakistan’s foreign reserves, which totaled $16.6 billion as of November 29, 2024, according to the State Bank of Pakistan (SBP). Of this, $12 billion is held by the SBP, bolstered by a $500 million inflow from the Asian Development Bank (ADB).
Additionally, the Saudi Fund for Development (SFD) extended a $3 billion deposit maturing on December 5, 2024, for another year. The extension followed discussions between Prime Minister Shehbaz Sharif and Saudi Crown Prince Mohammad Bin Salman during the “One Water Summit” in Riyadh.
Lower inflation has also contributed to investor confidence. The inflation rate dropped to 4.9% in November, its lowest since 2017, marking a sharp decline from last year’s high of 38%. This figure falls well below the SBP’s target range of 5-7%, creating room for further monetary easing.
Market analysts expect the SBP to cut interest rates by at least 200 basis points at its December 16 meeting, potentially bringing the total reduction since June to 900 bps.
With strong economic fundamentals and optimism about future rate cuts, the PSX is poised for sustained growth as it nears the 110,000-point milestone, reflecting confidence in Pakistan’s economic recovery.
