KARACHI: The Pakistan Stock Exchange (PSX) opened the week on a high note as the benchmark KSE-100 Index reached an all-time record on Monday, propelled by strong investor sentiment and supportive economic factors.
In intra-day trading, the index surged by 526 points, surpassing the 94,000-point threshold for the first time in history.
This latest surge builds on a streak of strong performances, following a gain of more than 2,400 points the previous week.
Market analysts attribute much of the momentum to the State Bank of Pakistan’s (SBP) recent decision to cut its policy rate by 2.5 percentage points, a move that is seen as boosting liquidity and improving market stability.
The policy rate reduction has been viewed positively by investors, who believe it will help spur economic activity and strengthen Pakistan’s financial markets.
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The strong market performance is further supported by robust demand for government-backed securities.
The government’s recent Sukuk auction raised significant capital, with yields across all tenors falling, a clear signal of strong investor appetite for these securities. This move not only adds to government coffers but also bolsters confidence in Pakistan’s economic outlook.
On the macroeconomic front, Pakistan’s workers’ remittances have remained strong, reaching $3.1 billion during the month.
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In addition, the SBP’s foreign exchange reserves rose by $18 million, bringing the total to $11.17 billion.
Together, these figures point to a steady flow of foreign capital into the country, helping strengthen the rupee and improve the country’s overall economic position.
Investors React to Rate Cuts and Global Trends
The latest surge in the KSE-100 Index was also fueled by a broader global market rally, with rising international equities and declining local lending rates offering additional tailwinds to the local market.
On Friday, the index surpassed the 93,000-point mark for the first time, reflecting growing investor confidence and optimism about Pakistan’s economic future.
By the end of the week, the KSE-100 Index closed at 93,292, reflecting a week-on-week gain of 2,432 points, or 2.7%.
The strong weekly performance was accompanied by a 31% surge in average trading volumes, which reached 735 million shares, signaling growing market participation and investor interest.
The SBP’s decision to lower the policy rate to 15% was part of a broader monetary easing cycle aimed at combating inflation.
This was the fourth consecutive rate cut, bringing the cumulative reduction to 700 basis points from a peak of 22%.
The central bank’s actions are being seen as a necessary step to support economic growth and ease pressure on businesses and consumers alike.