- Sentiment reinforced mainly by disinflation and improving reserves.
- The KSE-100 index gained 982.77 points and closed at 114,230.06.
- The index reached an intraday high of 114,496.08, then fell to 113,083.86.
After a massive correction last week, the capital market got off to a strong start on Monday, buoyed by bets that the central bank would further ease monetary policy at its next meeting, traders said.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index closed at 114,230.06, gaining 982.77 points, or 0.87 percent, from the previous session’s close of 113,247.29 .
The recovery was supported by improving inflation data and hopes of supportive monetary policy from the State Bank of Pakistan (SBP).
Commenting on the trading activity, CEO of Ismail Iqbal Securities, Ahfaz Mustafa said: Geo.tv“The market is recovering due to expected monetary policy and a general recovery after last week’s correction.”
“Momentum from last trading day continues; however, the volumes are lower,” he added.
With inflation showing a sharp decline, market participants are expecting a potential rate cut at the first meeting of the SBP’s Monetary Policy Committee (MPC) of 2025, scheduled for January 27.
Inflation fell to 1.8% year-on-year for the week ending January 9, its lowest level since October 2014, further fueling hopes for an accommodative monetary policy.
Pakistan’s total foreign exchange reserves hit a three-year high of $18.7 billion in November 2024, supported by rising gold reserves and improving remittances.
The country’s current account surplus stood at $944 million for the first five months of FY25, a sharp turnaround from the $1.67 billion deficit recorded in the same period of last year.
Total reserves hit a three-year high of $18.7 billion in November 2024, supported by strong remittances and rising gold prices.
Remittances provided further support, reaching $3.1 billion in December, an increase of 29.3% year-on-year. For the first half of FY25, cumulative remittances increased by 32.8% to $17.8 billion.
On the fiscal front, Pakistan Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial reiterated the government’s ambitious target of collecting Rs 13.5 trillion in tax revenue this year, despite a deficit of Rs 386 billion. rupees in the first half of FY25.
He called for structural reforms to the tax system to bring wealthier individuals into the tax net, highlighting systemic problems on both the side of taxpayers and collectors.
Last week, PSX experienced a turbulent period, largely driven by political and security concerns. The KSE-100 index lost significant value, closing at 113,247.29 after a four-game losing streak. The decline was exacerbated by aggressive selling by panicked investors, despite positive economic data.
However, the search for institutional value last session provided some respite, signaling recovery potential.