PSX KSE-100 index surpasses 111,000 points in historic rally amid economic optimism
The Pakistan Stock Exchange (PSX) achieved a historic milestone, with the benchmark KSE-100 Index crossing the 111,000-point mark for the first time. This remarkable surge reflects growing investor confidence fueled by improving macroeconomic indicators and expectations of a favorable monetary policy.
The rally began with a sharp increase of over 1,000 points within the first five minutes of trading on Tuesday, propelling the index to 111,014 points. By midday, the index climbed further, reaching an intraday high of 111,759.58—marking a gain of 1,789.2 points, or 1.63%, from Monday’s close of 109,970.38.
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Several factors have contributed to this surge. Analysts cite declining inflation, improved foreign reserves, increased economic activity, and expectations of a rate cut as primary drivers. November inflation dropped to 4.9%, the lowest since April 2018, creating optimism about potential monetary easing during the upcoming State Bank of Pakistan (SBP) policy meeting on December 16.
Sana Tawfik, Head of Research at Arif Habib Limited, highlighted that “anticipation of a rate cut, lower inflation, improved liquidity, and low bond yields making equities an attractive asset class are the key drivers.”
Macroeconomic improvements have bolstered market sentiment. Saudi Arabia’s extension of a $3 billion deposit and formalized trade deals worth $560 million have strengthened Pakistan’s foreign reserves. Additionally, remittances reached $14.8 billion during the first five months of FY2025, a 33.6% year-on-year increase, driven by a stable rupee, government incentives, and a rise in emigration.
Economic activity has remained robust, with petroleum sales hitting a 25-month high of 1.58 million tons in November. Furthermore, the government’s successful Rs353 billion Ijarah Sukuk auction has enhanced liquidity in the financial system.
The rally underscores the confidence investors have in Pakistan’s economic outlook, supported by ongoing reforms and improved liquidity. “Consistent liquidity flow from mutual funds and individuals, driven by better returns and favorable taxation treatment, has been a factor,” noted Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company.
The KSE-100 Index has extended its rally for nine consecutive sessions, with Monday’s trading closing at 109,970.38 after gaining 916.43 points, or 0.84%.
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