KARACHI, (TDI): The Pakistan Stock Exchange (PSX) KSE-100 Index witnessed a bullish trend on Monday, recovering from a dip to 114,301.80 points on the previous Friday.
Early trading saw the benchmark KSE-100 Index surge by 1,525.14 points, or 1.33%, reaching an intraday high of 115,826.94 points.
This upward movement follows a strong performance last week, driven by expectations of a potential policy rate cut by the State Bank of Pakistan (SBP) and positive economic indicators.
Market enthusiasm is further fueled by the anticipated outcome from the Monetary Policy Committee (MPC), which is speculated to announce a rate cut ranging from 200 to 500 basis points. Business leaders are advocating for a more substantial rate cut to stimulate economic growth, while analysts predict a more cautious adjustment.
Recent data shows that November inflation dropped to 4.9%, resulting in a positive real interest rate of 10%, providing more room for easing monetary policy.
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The government’s decision to cut Savings Account returns by 250 basis points under the revised National Savings Schemes (NSS) is expected to shift funds from savings to equity markets.
Foreign inflows have also contributed to the bullish sentiment. Remittances rose by 29% year-on-year to $2.9 billion in November, which will help support foreign reserves, which stood at $16.6 billion as of December 6, 2024.
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The SBP’s reserves reached $12.051 billion, the highest since March 2022. Meanwhile, the Current Account Deficit (CAD) has dropped by 79% year-on-year, falling to $217 million in the first two months of FY 2025, driven by robust remittance flows and consistent export earnings.
Exports are forecasted to reach $33 billion by the end of FY2025, while remittances are expected to rise to $33.5 billion.
