After the announcement of a much anticipated policy rate cut, the performance of the Pakistan Stock Exchange (PSX) remained mixed. At the opening of the day’s trade, the PSX briefly crossed the 117,000 mark for the first time ever but the benchmark index was immediately brought down by selling activity.
At 1:30 pm, the KSE-100 hovered around 115,932.98 points, down by almost 236 points or 0.2% compared to yesterday.
Selling volume was high in sectors such as oil and gas exploration, OMCs, power generation, fertiliser, and automobile assemblers. Meanwhile, more buying interest was observed in commercial banks.
The market rallied on Monday, driven by the State Bank of Pakistan’s (SBP) decision to slash the key policy rate by 200 basis points to 13%, marking the fifth consecutive cut since June 2024 when it stood at 22%. The Monetary Policy Committee (MPC), in its statement, attributed the rate reduction to a sharp decline in headline inflation, which eased to 4.9% year-on-year in November, primarily due to lower food inflation and the fading impact of last year’s gas tariff hike.
However, the MPC flagged concerns over persistently high core inflation at 9.7% and volatile inflation expectations among consumers and businesses. The committee reiterated that while inflation may remain unpredictable in the short term, it is expected to stabilize within the target range in the coming months.
Buoyed by the rate cut, the benchmark KSE-100 Index surged nearly 1,900 points on Monday, settling above the 116,000 mark for the first time in history with a 1.7% gain, reflecting strong investor optimism.
