ISLAMABAD, October 25, 2024: The Pakistan Stock Exchange (PSX) experienced a remarkable rally on Friday, with the benchmark KSE-100 index soaring by more than 1,100 points to reach an intraday high of 90,087.41.
This surge, which represents a 1.25% increase from the previous close of 88,945.98, reflects a growing bullish sentiment among investors.
Mohammed Sohail, CEO of Topline Securities, remarked that the index’s climb to the 90,000 mark signifies one of the fastest record gains, with a staggering 125% increase over the past 18 months.
Analysts attribute this upswing to anticipations of a monetary policy rate cut in the upcoming Monetary Policy Committee (MPC) meeting scheduled for November 4.
Sana Tawfik, head of research at Arif Habib Limited, noted that the current strong earnings season and improved liquidity have further fueled investor confidence.
Awais Ashraf, director of research at AKD Securities, emphasized that optimism surrounding the potential policy rate cut, along with strengthening economic fundamentals and a lack of attractive investment alternatives, has driven increased interest in stocks.
Yousuf M. Farooq, director of research at Chase Securities, echoed this sentiment, stating that declining interest rates are making equities more appealing to investors. He added that funds are increasingly flowing into the stock market.
Most analysts predict that the central bank will reduce its policy rate by 200 basis points in its upcoming meeting, marking the fourth consecutive cut since June. This expectation is supported by recent economic indicators, including a decline in inflation, a low current account deficit, and rising remittances.
A survey by Topline Securities revealed that 85% of market participants anticipate at least a 200 basis point cut, bolstered by a single-digit inflation rate of 6.9% in September. The firm expects the inflation trajectory to remain stable in October, hovering between 6.5% and 7.0%.