The Pakistan Stock Exchange (PSX) continued its bullish momentum on Tuesday, with the benchmark KSE-100 Index settling above the historic 92,000 mark for the first time.
This upward rally is driven by increased investor confidence, supported by improved economic indicators and the recent 250 basis points (bps) rate cut by the State Bank of Pakistan (SBP).
According to the PSX website, the benchmark index closed at 92,304.32 level, up by 366.32 points or 0.4% from the previous close of 91,938.00 points.
Major sectors including automobile assemblers, cement, oil and gas exploration, chemicals, commercial banks, fertilizers, and oil marketing companies observed widespread buying activity.
Index-heavy stocks, such as OGDC, PPL, SNGP, SSGC, and HCAR, traded positively, contributing to the index’s rise.
On Monday, the SBP reduced the key policy rate by 250 bps from 17.5% to 15%. Many economists were expecting the SBP to cut the policy rate by 200 basis points. This is the fourth consecutive reduction since June 2024.
In its statement, the Monetary Policy Committee noted that inflation has declined faster than expected and has reached close to its medium-term target range in October (7.2%). The committee assessed that the tight monetary policy stance continues to play an important role in sustaining the downward trend in inflation.
Last week, the KSE-100 index gained 0.96% week-over-week (WoW). The positive rally was fueled by an anticipated continuation of monetary easing and the country reporting its first-ever quarterly budget surplus in over 20 years of Rs1.7 trillion during the first quarter of FY25, coupled with strong corporate results.
However, the government missed two of the IMF’s quarterly targets: one for tax collection, marking a shortfall of Rs 90 billion, and another for cash surplus for the provinces, marking a shortfall of Rs 182 billion.
The headline inflation for October clocked in at 7.2% YoY, with real interest rates comfortably above 10% at current policy rate levels.
On the macro front, the trade deficit for October clocked in at $1.4 billion, with exports for the month standing at $2.97 billion, up 4.9% MoM.
