The Pakistan Stock Exchange continued its bullish trend on Tuesday, surpassing 104,000 points and adding over 1,000 points to the index, following the announcement that inflation had dropped to its lowest level in six and a half years in November.
The KSE-100 index climbed by 1,084.31 points, or 1.05%, closing at 104,359.25 at 2:47 p.m. After a sharp early drop of 449 points, the market rebounded, reaching an intraday high of 104,445.80.
The surge came after news that Pakistan’s annual inflation rate had decreased to 4.9% in November, the lowest since 2017. Additionally, the country’s trade deficit narrowed by 19% year-over-year, reaching $1.59 billion.
“The market is trending upwards in anticipation of lower interest rates and stronger earnings growth,” said Yousuf M. Farooq, research director at Chase Securities. He encouraged retail investors to focus on long-term goals and diversify their portfolios through consistent monthly investments.
According to Awais Ashraf, research director at AKD Securities, the November inflation report has pushed real interest rates above 10%, potentially paving the way for rate cuts by Pakistan’s central bank. Ashraf added that investors are optimistic about the State Bank of Pakistan (SBP) continuing monetary easing in the upcoming Monetary Policy Committee (MPC) meeting and suggested focusing on sectors likely to benefit from structural reforms and lower rates.
