On the opening day of the new business week, the Pakistan Stock Exchange (PSX) saw bullish activity as the KSE-100 index crossed the 92,000 mark for the first time in history, driven by higher buying activity and expectations of a policy rate cut.
Bulls Rule Pakistan Stock Exchange as KSE-100 Index Crosses 92,000 Barrier
The Pakistan Stock Exchange (PSX) opened the new business week with significant bullish activity, pushing the KSE-100 index beyond the historic 92,000 mark. This remarkable surge reflects a positive shift in investor sentiment, buoyed by political stability and the anticipation of a policy rate cut by the State Bank of Pakistan (SBP).
Record-Breaking Performance
During intraday trading, the KSE-100 index gained 1,202 points, reaching an all-time high of 92,062 points. This surge comes after the previous close of 90,859.85 points, signaling a robust buying activity. Market analysts attribute this positive momentum to several factors, including political stability and favorable economic indicators.
Political Stability and Economic Optimism
Experts highlight that the recent political stability in the country has played a crucial role in boosting investor confidence. The anticipation of a significant cut in the policy rate by the SBP has also fueled optimism among traders. Reports suggest that the Monetary Policy Committee (MPC) of the SBP is set to meet today, November 4, to decide on the policy rate for the next two months.
Expectations of a Policy Rate Cut
Market reports indicate that the policy rate is expected to drop by 200 basis points, driven by a decline in inflation and a shrinking current account deficit. The inflation rate has dropped to its lowest level in three and a half years, providing a strong case for a rate cut. Financial experts predict that a 200 basis point reduction could bring the policy rate down to 15.5 percent, which would have a positive impact on the market.
Impact on Traders and Industrialists
The potential rate cut is seen as a boon for traders and industrialists, who are optimistic about a 200 basis point reduction. However, some market participants are speculating an even larger cut, despite concerns that further reductions could exert pressure on the rupee and impact foreign investment, particularly in other emerging markets.
Read More: Pakistan’s Inflation Rate: October 2024 Update
Conclusion
The historic rise of the KSE-100 index beyond the 92,000 mark is a testament to the positive momentum in the Pakistan Stock Exchange. Driven by political stability and expectations of a policy rate cut, the market is showing signs of robust growth. As the SBP’s Monetary Policy Committee prepares to announce its decision, investors are hopeful that a favorable outcome will further boost market confidence and economic stability.