PSX Hits Record High Above 103,000 as Strong Fundamentals and Sectoral Growth Fuel Rally
The Pakistan Stock Exchange (PSX) continued its bullish momentum on Monday, with the benchmark KSE-100 Index soaring 1,860.12 points during intraday trading, reaching an all-time high of 103,217.44. This remarkable surge reflects a 1.44% gain from the previous close of 101,357.32, driven by robust economic fundamentals, strong sectoral performances, and optimism surrounding a potential policy rate cut.
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Market analysts attribute this rally to improving macroeconomic indicators, including a projected decline in inflation to its lowest level since 2018. Experts predict inflation could drop to 4.7%, fostering hopes of a larger-than-expected interest rate cut by the State Bank of Pakistan (SBP), which could further energize economic activity and shift investor focus from bonds to equities.
Key Drivers Behind PSX’s Record Rally:
- Economic Optimism: The market’s momentum was fueled by the receipt of $500 million from the Asian Development Bank (ADB) under the Climate Change and Disaster Resilience Enhancement Program, bolstering foreign exchange reserves to nearly $12 billion and enhancing investor confidence.
- Sectoral Leadership: Commercial banks led the charge, adding 1,675 points last week, supported by the removal of the Minimum Deposit Rate (MDR) requirement for corporate deposits. Gains were also observed in technology, oil and gas, and real estate sectors.
- Improved Liquidity: The steady decline in bond yields has redirected investments toward equities, driving higher market liquidity. The average daily traded value increased by 7.1% week-on-week, reaching Rs 36.85 billion.
- Policy Reforms: Decisive government actions and reduced costs of doing business have created a favorable environment for sustained growth.
Market Outlook:
Experts remain optimistic about the PSX’s trajectory, citing consistent policy support, stabilizing external accounts, and strong investor participation. With inflation projected to drop to 5.6%-6.5% by December, the potential for further rate cuts by the SBP adds to the market’s appeal.
The rally follows last week’s historic milestone of surpassing the 100,000-point mark, with the KSE-100 Index gaining 3,559.09 points over the week. Despite political uncertainties, the market showcased resilience, highlighting its strength amidst a favorable economic and regulatory backdrop.
As the PSX charts new territory, sustained investor confidence and macroeconomic stability are expected to drive further growth, cementing its position as a key player in Pakistan’s economic revival.
