PSX Opens in Green as Investors Cheer Policy Rate Cut

The Pakistan Stock Exchange (PSX) experienced a positive start on Tuesday, with the benchmark KSE-100 Index surging nearly 800 points following the State Bank of Pakistan’s (SBP) decision to reduce the key policy rate by 100 basis points to 11%. 

Market Reaction

At 10:15 AM, the KSE-100 Index stood at 114,869.36, reflecting a 0.67% increase. Investor sentiment was buoyed by the rate cut, which exceeded market expectations. Analyst Mohammed Sohail of Topline Securities noted that the 100 basis point reduction was higher than the anticipated 50 basis points. ([Business Recorder][1])

Sector Performance

Positive momentum was observed across various sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration companies, oil marketing companies (OMCs), power generation, and refineries. Notable stocks such as HUBCO, NRL, PSO, MARI, OGDC, PPL, POL, MCB, UBL, and NBP were among the gainers. 

Global Market Overview

While Asian markets displayed mixed performances, the PSX’s rally was attributed to domestic factors, particularly the SBP’s monetary policy adjustment. Global concerns, including potential U.S. tariffs and fluctuating oil prices, influenced investor behavior in other regions but had limited impact on Pakistan’s market sentiment. 

Outlook

The SBP’s decision to lower the policy rate is expected to stimulate economic activity by reducing borrowing costs for businesses and consumers. Investors are optimistic that this move will support economic growth and enhance market liquidity. However, analysts advise monitoring upcoming fiscal policies and global economic developments that could influence market dynamics.