Bulls continued to dominate the Pakistan Stock Exchange (PSX) on Monday, with shares surging by over 800 points during intraday trading. By 10:42 AM, the benchmark KSE-100 index had climbed by 855.89 points, or 0.95%, reaching 90,849.85 points compared to the previous close of 89,993.96 points. The momentum persisted, and by 12:13 PM, the index had exceeded the 91,000 threshold.
Mohammed Sohail, CEO of Topline Securities, attributed this ongoing “non-stop bull run” to stronger-than-anticipated corporate profits and growing optimism regarding significant rate cuts in the upcoming Monetary Policy Committee (MPC) meetings scheduled for November and December.
Awais Ashraf, Director of Research at AKD Securities, reinforced this perspective, stating that “optimism surrounding potential interest rate cuts and robust corporate earnings is currently boosting investor sentiment.” Similarly, Sana Tawfik, Head of Research at Arif Habib Limited, noted that expectations for substantial interest rate reductions, a strong corporate earnings season, and enhanced liquidity are fueling the bullish momentum.
Last Friday, the stock market experienced a notable surge as investors anticipated a significant interest rate cut in the forthcoming MPC meeting set for November 4. Analysts generally forecast that the State Bank of Pakistan (SBP) will lower its policy rate by 200 basis points in this meeting, marking the fourth consecutive cut since June. This prediction is supported by declining inflation rates, a manageable current account deficit, and rising remittances.
According to a recent survey by Topline Securities, 85% of market participants believe that the central bank will announce at least a 200 basis point reduction. The brokerage firm pointed out that the heightened expectations for larger cuts are driven by the single-digit inflation rate of 6.9% recorded in September 2024. They anticipate that inflation will remain within the range of 6.5% to 7.0% in October.
This environment has led to a positive outlook for investors, suggesting that the PSX may continue to experience upward momentum in the coming weeks.
