The capital market maintained its record-breaking pace on Tuesday, buoyed by rising economic optimism and a dramatic drop in inflation, which has bolstered investor confidence.
The benchmark KSE-100 shares index of the Pakistan Stock Exchange (PSX) rose further, gaining 1,170.86 points or 1.13 percent to hit a new intraday high of 104,445.8, on investor sentiment on record low inflation and continued economic reforms. With hope.
The market’s exceptional performance reflects the changing impact of stabilizing macroeconomic conditions and rising expectations of significant monetary easing, laying a strong foundation for sustainable growth.
The day’s trading began on a ceremonial note when Federal Minister for Planning Ahsan Iqbal sounded the traditional gong to open trading at the PSX.
During the event, Ahsan Iqbal highlighted the government’s commitment to economic stability and long-term development. He said that crossing the 100,000 mark in the 100-index shows the potential of Pakistan in front of the world.
“Inflation has dropped from 38% to below 5% in two years, and the stock market has gone from 30,000 to 100,000 points,” he said, highlighting the PSX as one of the most successful markets globally. Hoy noted.
PSX Chairperson Dr. Shamshad Akhtar highlighted the importance of Pakistan’s strong capital market and its recent achievements.
“Crossing 100,000 points last week brought renewed excitement to the market,” he said, adding that the PSX’s ability to finance long-term development projects makes it an important asset for Pakistan’s economic future.
Reflecting on the market’s performance, Dr. Akhtar pointed out that the PSX has returned 7% in dollar terms over the past five years.
A key factor in today’s rally was Prime Minister Shehbaz Sharif’s expectation of a possible cut in the key policy rate by the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) in its upcoming meeting. Analysts believe that this will further strengthen the policy. Equity markets.
Addressing the Federal Cabinet meeting on Monday, expressed optimism about a further reduction in the State Bank’s policy rate.
The prime minister highlighted the 4.9% inflation rate recorded in November – the lowest in six-and-a-half years – as a game changer for the country’s economic landscape.
Inflation data released by the Pakistan Bureau of Statistics (PBS) showed a significant slowdown, beating the forecast of 5.8%-6.8%.
Recalling the inflation level of 3.5 percent during the previous Pakistan Muslim League-Nawaz (PML-N) regime, the prime minister said it was beyond imagination.
Analysts note that cooling price pressures reflect a combination of better monetary measures and stable economic fundamentals and see this as a clear sign of easing price pressures, prompting the State Bank of India to raise interest rates further. A decline could be signaled, creating a more favorable environment for equity markets.
Monday’s session set the tone for today’s rally, with the KSE-100 gaining 1,917.62 points to close at a record 103,274.94.
Sectors such as banking, technology, and oil and gas exploration were the last to gain, with banking stocks benefiting substantially from recent regulatory changes, such as the removal of the minimum deposit rate (MDR) requirement for corporate deposits.
As the PSX continues to explore unprecedented territory, market analysts expect sustained growth, supported by consistent policy initiatives, stable external accounts, and a reduction in the cost of doing business.