The Pakistan Stock Exchange (PSX) continued its record-breaking rally on Friday, driven by investor optimism over the government’s electricity relief package, declining inflation, and confidence in the International Monetary Fund (IMF) program.
The benchmark KSE-100 Index surged to a new intraday high of 120,796.67, gaining 1,858.56 points (1.56%), while the day’s low was recorded at 119,085.73. The market opened strongly in positive territory, extending Thursday’s post-Eid momentum.
According to Ahfaz Mustafa, CEO of Ismail Iqbal Securities, “The market hit a new high yesterday due to electricity price cuts and a structured plan to address circular debt. This has boosted investor confidence.” He also noted that multi-decade low inflation and expectations of an IMF tranche are fueling the market’s bullish sentiment.
The rally follows Prime Minister Shehbaz Sharif’s announcement of power tariff reductions—Rs7.69 per unit for domestic consumers and Rs7.59 for industrial users. The move, aimed at easing economic pressure and improving industrial competitiveness, was approved by the IMF under its $7 billion Extended Fund Facility (EFF).
Adding to the positive outlook, inflation data from the Pakistan Bureau of Statistics (PBS) revealed a historic drop in Consumer Price Index (CPI) inflation, which rose by just 0.7% year-on-year in March 2025, down from 1.5% in February and a dramatic decrease from 20.7% in March 2024. Analysts at Arif Habib Limited (AHL) highlighted that this marks the lowest inflation rate since December 1965. On a month-on-month basis, CPI increased by only 0.9%, following a 0.8% decline in February.
The average CPI inflation for the first nine months of FY25 (9MFY25) now stands at 5.25%, a significant improvement from 27.06% in 9MFY24, strengthening expectations of further monetary policy easing by the State Bank of Pakistan (SBP).
The market’s bullish trend was already set on Thursday, following the long Eid holidays. The KSE-100 Index gained 1,131.36 points (0.96%), closing at 118,938.11, after hitting a session high of 119,179.46 and a low of 117,508.07.
With economic reforms, easing inflation, and IMF backing, the market is poised for continued growth, reinforcing investor confidence in Pakistan’s financial stability.
