Islamabad, Dec 6: The Pakistan Stock Exchange (PSX) continued its record-breaking rally on Friday, surpassing the 109,000-point milestone. This surge in the market was fueled by strong macroeconomic fundamentals, including a rise in foreign reserves, a significant drop in inflation, and growing optimism ahead of anticipated monetary policy changes.
Key Highlights:
- PSX KSE-100 Index: The index rose by 1,239.12 points, or 1.14%, reaching a new intraday high of 109,478.08 points.
- Recent Growth: This marks another major achievement, following the crossing of the 100,000-point mark just a week ago.
Driving Factors:
- Macroeconomic Factors:
- Pakistan’s foreign reserves reached $16.6 billion as of November 29, 2024, with $12 billion held by the State Bank of Pakistan (SBP), reflecting a $620 million increase, partly due to a $500 million inflow from the Asian Development Bank (ADB).
- A $3 billion Saudi deposit was rolled over, strengthening the country’s financial position.
- Inflation Rate Decline: Inflation dropped to 4.9% in November, its lowest level since 2017, creating a favorable environment for further monetary easing.
- Sector Performance: The rally was largely driven by selected stocks in the oil and banking sectors, supported by speculations ahead of the SBP’s key policy rate announcement.
Future Outlook:
- Market Optimism: Analysts expect the SBP to reduce interest rates by at least 200 basis points in its December meeting, continuing the bullish trend in the market.
- Liquidity Boost: Increased liquidity from both local and international sources, including the rollover of the Saudi deposit and expectations of a rate cut, are expected to fuel further growth.
With the PSX approaching the 110,000-point milestone, analysts remain optimistic about continued growth, supported by strong economic fundamentals and favorable market conditions.
