The stock market saw a mixed session on Thursday, with investors torn between growing euphoria and strategic profit-taking.
A record-breaking intraday high highlighted strong investor confidence, driven by easing inflation, improved liquidity, and positive macroeconomic indicators. Additionally, December’s consumer price index (CPI) reading of 4.1 percent year-on-year, the lowest in 6.5 years, bolstered hopes for a sustained economic recovery.
The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) closed at 117,119.65, up a marginal gain of 111.57 points or 0.1 percent from the previous session’s close of 117,008.08. The market touched a new intraday record high of 118,367.81 before trading down to a low of 116,857.61.
Summarizing the key drivers, Sana Tawfiq, head of research at Arif Habib Ltd, said, “CPI reading fell to a 6.5-year (80-month) low of 4.1 percent, with improved liquidity (fresh from fixed income assets). plus conversions).
In the federal cabinet meeting on Wednesday, Prime Minister Shehbaz Sharif expressed satisfaction over the macroeconomic stability achieved so far, but stressed the need to shift focus to development. He said that now we have to step into the export sector because there is no other option for economic development.
Emphasizing the importance of export-led growth, Shahbaz said that the Federal Board of Revenue (FBR) needs strong enforcement to meet the revenue targets set by the International Monetary Fund (IMF). Actions should be taken.
The Prime Minister also highlighted the recent increase in revenue collections, which reached a 25-year high. However, they recognized a significant gap between collected revenues and the ambitious targets set by the IMF.
Inflation data has also boosted investor sentiment. The Consumer Price Index (CPI) fell to 4.1 percent year-on-year in December 2024, from 4.9 percent in November and a staggering 29.7 percent in December 2023.
While the year-on-year decline signals economic stability, month-on-month inflation edged up a modest 0.1 percent, pointing to underlying cost pressures.
Prime Minister Shehbaz on Tuesday unveiled the five-year national economic transformation plan of “Iran Pakistan”. The initiative aims to attract foreign investment of $10 billion annually and encourage local investment through sustainable export development.
Anchored on the “5Es”—exports, e-Pakistan, environment, energy, equity, and empowerment—the plan targets six percent GDP growth by 2028, creation of 1 million jobs annually, and strong private sector participation. keeps
On the trade front, Pakistan’s trade deficit widened 35 percent year-on-year to $2.44 billion in December, the highest since April 2024. -year growth, standing at $2.84 billion.
Month-on-month, the trade deficit widened by 47 percent, reflecting a sharp increase in import activity.
The FBR reported collections of Rs 5,623 billion in the first half of FY 2024-25, though this fell short of the IMF’s target of Rs 6,009 billion. Measures such as a 44 per cent fixed tax on banking sector profits generated revenue of Rs 72 billion, providing a partial cushion against the deficit.
On Wednesday, the PSX posted a strong gain, with the KSE-100 index up 1,881.18 points or 1.63% to close at 117,008.08. Analysts cited fresh appropriations and better-than-expected tax collection numbers, signaling that additional tax measures may not be needed.
A combination of a well-defined economic strategy, declining inflation, and improving investor confidence positions the PSX for sustained positive momentum.