KARACHI, October 28, 2024 — The Pakistan Stock Exchange (PSX) experienced a remarkable surge on Monday, with the benchmark KSE-100 index climbing more than 800 points in intraday trade. As of 10:42 AM, the index had gained 855.89 points, or 0.95%, reaching 90,849.85 points from the previous close of 89,993.96. By 12:13 PM, it crossed the significant 91,000 milestone, reflecting robust investor confidence.
Key Drivers Behind the Bull Run
The continuous bullish momentum at the stock exchange can be attributed to several factors:
- Strong Corporate Earnings: Analysts are optimistic due to better-than-expected corporate profits, which have been a major catalyst for market enthusiasm.
- Anticipation of Rate Cuts: There is growing hope among investors for significant interest rate cuts in the upcoming Monetary Policy Committee (MPC) meetings scheduled for November and December.
Mohammed Sohail, CEO of Topline Securities, remarked on the “non-stop bull run” fueled by these developments, emphasizing that the positive sentiment is expected to continue.
Investor Sentiment Soars
Awais Ashraf, director of research at AKD Securities, stated, “Optimism surrounding potential interest rate cuts and strong corporate earnings is currently boosting investor sentiment.” This sentiment was echoed by Sana Tawfik, head of research at Arif Habib Limited, who noted that improved liquidity is also playing a crucial role.
Market Predictions: What’s Next?
Last Friday, the stock market rallied based on investor expectations of a significant interest rate cut in the forthcoming MPC meeting on November 4. Most analysts predict that the State Bank of Pakistan (SBP) will announce a 200 basis point reduction, marking the fourth consecutive cut since June. This is largely due to a decline in inflation, a low current account deficit, and increased remittances.
According to a recent survey by Topline Securities, 85% of market participants anticipate a minimum 200 basis point cut from the central bank. “The larger rate cut expectations in the upcoming monetary policy meetings are driven by a single-digit inflation reading of 6.9% in September 2024,” the firm noted, with projections indicating that inflation will remain between 6.5% to 7.0% in October.
