PSX soars on rate cut optimism

The Pakistan Stock Exchange (PSX) on Monday witnessed a remarkable surge, driven by bullish market sentiment and investor optimism. Stocks across various sectors rallied as investors anticipated a significant rate cut by the State Bank of Pakistan (SBP), fuelled by low inflation and a decrease in short-term government bond yields nearing 11.99%. The upward momentum was further supported by strong buying activity from local institutions in key sectors, including autos, E&Ps, and refineries. Additionally, anticipation of the upcoming monetary policy review, alongside easing political noise, upbeat economic indicators, and trade balances, played a critical role in the record surge at PSX. According to Ahsan Mehanti of Arif Habib Corp, stocks were bullish, led by scrips across the board as investors expected a significant SBP rate cut amid thin inflation and a cut in short-term government bond yields near 11.99%. He added that easing political noise, resolve over IPP contracts, and upbeat economic indicators for trade balances, FX reserves, and remittances played a catalyst role in the record surge at PSX.