Stocks on the Pakistan Stock Exchange (PSX) surged for the second consecutive day on Friday, driven by investor optimism surrounding potential corporate earnings and expectations of monetary easing. The KSE-100 Index rose by 1049.32 points, or 0.93%, closing at 114,255.72, after reaching an intraday peak of 115,106.99.
Investor sentiment was fueled by speculation over upcoming earning announcements, with stocks across various sectors performing well. Ahsan Mehanti, CEO of Arif Habib Commodities, attributed the bullish trend to the State Bank of Pakistan’s (SBP) hints at further interest rate cuts, bolstered by a stable rupee, falling government bond yields, and lower inflation.
SBP Governor Jameel Ahmad confirmed that cooling inflation offered room for further rate reductions, which boosted market confidence. Inflation, which peaked at 38% in May 2023, has recently dropped to single-digit increases, and analysts predict additional rate cuts in the coming months.
Despite the positive stock market performance, concerns over the country’s foreign exchange reserves remain, with SBP reserves declining by $76 million, bringing total reserves to $11.372 billion as of January 24. Analysts are closely monitoring foreign exchange trends and upcoming corporate earnings reports, expecting continued market volatility in the short term.
