The Pakistan Stock Exchange (PSX) rebounded strongly on Wednesday, with the KSE-100 Index climbing 1,376.02 points (1.2%) to an intraday high of 116,236.7. The surge was driven by improving macroeconomic indicators and policy measures that have boosted investor confidence.
Economic Highlights Fueling Market Sentiment
- Record Current Account Surplus: Pakistan’s current account recorded a $729 million surplus in November 2024, the highest since February 2015, marking a significant turnaround from a $148 million deficit in November 2023. The surplus for the first five months of FY2025 reached $944 million, compared to a $1.67 billion deficit last year.
- Foreign Direct Investment (FDI): Net FDI rose by 31% year-on-year, totaling $1.124 billion in the first five months of FY2025. Key contributions came from China, Hong Kong, and the UK, with notable investments in the power and finance sectors.
- Rising Remittances: November remittance inflows grew 29% year-on-year to $2.9 billion, bringing the total to $14.8 billion for FY2025 so far.
Policy Support and Inflation Control
The State Bank of Pakistan (SBP) recently reduced its policy rate by 200 basis points to 13%, stimulating market activity. Inflation dropped to 4.9% in November, the lowest since April 2018, creating room for further monetary easing.
Positive Market Trajectory
Despite Tuesday’s profit-taking session, which saw the KSE-100 Index retreat to 114,860.68, analysts remain optimistic about continued growth. With easing inflation, rising remittances, and increased FDI, the PSX is expected to sustain its upward trajectory, albeit with short-term volatility.
Prime Minister Shehbaz Sharif hailed the record current account surplus as a milestone for economic stability, further strengthening investor confidence.
The PSX’s performance reflects a strong outlook for Pakistan’s economy, with analysts predicting continued momentum amid favorable conditions.
