The Pakistan Stock Exchange (PSX) kicked off the week on a bullish note, with the benchmark KSE-100 Index surging over 900 points on Monday as investor confidence strengthened following the State Bank of Pakistan’s (SBP) decision to maintain its policy rate. The positive momentum marked a strong reversal after several sessions of profit-taking that had weighed on market performance.
At the opening bell, buying pressure dominated across key sectors, lifting the KSE-100 Index to an intraday high of 155,602.29 points. The upward trend persisted throughout the session, with the benchmark ultimately closing at 155,384.50, representing a gain of 944.82 points or 0.61 percent. Market observers attributed the strong rally to both domestic monetary policy stability and broader investor optimism about regional market conditions.
The most significant development of the day came from the Monetary Policy Committee (MPC) of the SBP, which kept the benchmark interest rate unchanged at 11 percent. This move was widely anticipated by analysts who believe that the central bank is likely to maintain a cautious stance in upcoming meetings as well, given the inflationary pressures expected from recent flooding and disruptions to food supply chains.
The PSX had just come off a volatile trading week, where it oscillated between fresh record highs and bouts of selling pressure. The index touched an all-time intraday peak of 157,817 points but ended last week at 154,440 points, gaining just 163 points or 0.1 percent week-on-week. Monday’s performance, therefore, was seen as a stabilizing force that renewed investor confidence heading into a decisive monetary and economic period.
Global financial markets also set the tone for investor sentiment. Asian stocks opened the week cautiously, as traders prepared for what is expected to be a significant week of central bank activity worldwide. The US Federal Reserve is widely projected to resume its easing cycle, with markets fully pricing in a 25 basis point cut that would bring its funds rate down to 4.0-4.25 percent. Futures markets suggest investors are bracing for multiple cuts, with 125 basis points already priced in for the coming months. Guidance from Fed Chair Jerome Powell and the central bank’s updated “dot plot” projections will be closely scrutinized to gauge the trajectory of future rate adjustments.
Elsewhere, the Bank of Canada is expected to trim its rates by a quarter point this week, while China’s central bank may adjust its market rates to combat sluggish growth. Both the Bank of Japan and the Bank of England are set to meet, with most analysts predicting no major policy changes. MSCI’s broadest index of Asia-Pacific shares outside Japan reflected the cautious mood, edging down 0.1 percent.
Back at home, the Pakistani rupee continued to hold steady against the US dollar, recording its 27th consecutive session of gains in the interbank market. The local currency closed at 281.52 against the greenback, appreciating by Re0.03 or 0.01 percent. Analysts note that the rupee’s resilience has provided an additional layer of confidence to equity investors, especially amid a more favorable external financing outlook and stable reserves.
Overall, Monday’s performance at the PSX underscored a renewed wave of optimism, driven by monetary stability, a resilient currency, and expectations of supportive global liquidity conditions. However, analysts caution that inflationary risks from domestic supply chain disruptions and global commodity price movements could continue to influence market dynamics in the near term.
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