PSX rebounds over 2,000 points as Oct inflation data fires up rate cut bets
Stocks rebounded on Friday, fired up by October’s tame inflation data, which bolstered expectations that the central bank would continue its rate-cutting cycle in its upcoming meeting on November 4, potentially reducing borrowing costs and stimulating economic activity.
Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Shares Index gained a massive 2,091.15 points to hit 91,057.91 points or 2.35% in an astronomical eleventh-hour rally, against the previous close of 88,966.76 points.
Ahsan Mehanti from Arif Habib Corp said stocks showed a sharp recovery amid upbeat data on CPI inflation at 7.2% year-on-year in October and the International Monetary Fund’s (IMF) revised inflation projection of 9.5% for FY2025.
“Speculation over an imminent SBP policy rate cut next week and a surge in SBP reserves to $11.2 billion played a catalytic role in the record bullish activity at the PSX,” Mehanti added.
Pakistan’s annual inflation rate punched in at 7.2% in October 2024, up from 6.9% in September but markedly lower than the 26.8% recorded in October 2023, data from the Pakistan Bureau of Statistics (PBS) showed on Friday.
The reading reinforced months of easing inflation — which hit a historic high of 38% last year and was at 26.8% in October 2023 — ahead of a meeting of the country’s central bank next week to review the policy rate, which stands at 17.5%.
The increase in the consumer price index (CPI) beats the market as well as government forecasts of 6.8%, bringing the average inflation for the first four months of FY2025 to 8.7%, down from 28.5% in the same period of FY2024.
