The Pakistan Stock Exchange (PSX) achieved a historic milestone on Monday, with the KSE-100 Index crossing the 116,000-point mark for the first time. The benchmark index closed with an impressive gain of 1,867.61 points, or 1.63%, settling at 116,169.41. During the session, the index hit an intra-day high of 116,681.59, reflecting robust investor optimism.
The surge was driven by heightened anticipation of further monetary easing from the State Bank of Pakistan (SBP), whose Monetary Policy Committee (MPC) meeting was scheduled later in the day. Investors were optimistic about another potential rate cut, encouraged by declining inflation and lower yields in recent Treasury bill auctions. In the latest auction, the yields on 3- and 6-month T-bills fell to 12%, marking declines of 100 and 89 basis points, respectively, further fueling market confidence.
Several sectors spearheaded Monday’s rally, including automobile assemblers, oil and gas exploration companies, and refineries. Energy sector stocks, such as MARI, OGDC, POL, and PSO, recorded significant gains, reflecting strong market sentiment. However, some profit-taking was evident in sectors like commercial banking and fertilizers, with major stocks like HBL, MCB, and ENGRO closing in the red.
The record-breaking performance builds on a remarkable previous week for the PSX. The KSE-100 Index gained 5,247.85 points on a weekly basis, closing at a then all-time high of 114,301.80 points last Friday. The week’s rally was supported by robust local investor participation and strong institutional buying, signaling growing confidence in the market.
Globally, investor attention is also focused on the U.S. Federal Reserve’s policy meeting scheduled for Wednesday. A 25 basis points rate cut is widely anticipated, but market participants are particularly interested in the Fed’s forward guidance, especially its “dot plot” projections for future interest rates.
The PSX’s stellar performance reflects growing optimism about Pakistan’s economic trajectory, supported by favorable macroeconomic indicators. Declining inflation, stable currency reserves, and easing monetary conditions have created a conducive environment for sustained growth. The stock market’s upward momentum underscores growing investor confidence in the country’s financial markets and economic outlook.
As the KSE-100 Index reaches new heights, market experts suggest that consistent policy support, combined with strong investor sentiment, could sustain the rally in the coming months. However, they also caution that global economic developments and domestic challenges will remain critical factors influencing market dynamics.
The PSX’s record-breaking rally serves as a testament to the resilience of Pakistan’s capital markets and signals increasing interest from both local and institutional investors. With macroeconomic indicators trending positively, the stock exchange could continue its upward trajectory, further solidifying its position as a key driver of economic growth.