The Pakistan Stock Exchange (PSX) surged past the 116,000-point threshold during intraday trading on Monday, driven by expectations of a significant interest rate cut in the State Bank of Pakistan’s monetary policy announcement later today.
The central bank has already reduced interest rates by 700 basis points across four consecutive meetings since June, bringing the rate to 15 percent. Analysts predict further reductions, with a Topline Securities poll revealing that 71 percent of participants anticipate a minimum cut of 200 basis points.
The benchmark KSE-100 index rose 1,932.63 points, or 1.69 percent, reaching an intraday high of 116,234.43, up from the previous close of 114,301.80.
“Strong liquidity in mutual funds combined with the anticipation of a sharp rate cut is propelling the market upwards,” said Raza Jafri, Head of Equities at Intermarket Securities. He noted that the rally was broad-based, although banking stocks lagged due to concerns over potential higher taxation.
This performance marks a continuation of strong momentum for Pakistani stocks, which have repeatedly closed at record highs this month.
In its weekly market review, Topline Securities highlighted the KSE-100 index’s 4.83 percent week-on-week gain, marking its eighth consecutive positive closing. The report attributed the robust performance to investor optimism surrounding interest rate cuts and sustained buying activity from mutual funds.
Economic data has further bolstered market sentiment. According to the Pakistan Bureau of Statistics, the country’s trade deficit narrowed by 7.39 percent during the first five months of the fiscal year (July-November), dropping to $8.651 billion compared to $9.341 billion in the same period last year. Exports rose by 12.57 percent to $13.69 billion, while imports increased by 3.90 percent to $22.342 billion.
November’s trade deficit showed an even sharper improvement, shrinking 18.60 percent year-on-year to $1.589 billion from $1.952 billion in November 2023.
This combination of positive economic indicators and policy expectations has fueled optimism among investors, driving the PSX to new heights.
