PSX scales new intraday high above 88,000 points on economic strength

Stocks on Thursday reached an intraday high of over 88,000 points with investors taking strong interest in rate-sensitive sectors, expecting a major loosening of monetary policy in the central bank's upcoming huddle due to an overall upbeat economic outlook.

The PSX's benchmark KSE-100 index surged by 901 points to reach 88,095 points during the intraday trade at 11:07am, up from the previous close of 87,194.53 points.

Commenting on the rally, Saad Ali, Director of Research at Intermarket Securities, said: "The market has remained bullish since the approval of Pakistan's $7 billion loan by the International Monetary Fund (IMF) under the Extended Fund Facility (EFF)."

The analyst told Geo.tv that following the IMF approval, political noise also died down following the approval of the 26th Constitutional Amendment — however, the Pakistan Tehreek-e-Insaf (PTI) remains adamant about protesting.

Brokerage Arif Habib Limited (AHL) in a note said the KSE-100 index crossed 88,000 points level and "is trading at an all-time high level".

"This remarkable performance reflects a 41% gain CYTD (calendar-year-to-date) in 2024  and a month-on-month increase of 8.5% — making the PSX the 4th high-performing equity market in the world," the brokerage said.

State Bank of Pakistan's (SBP) Monetary Policy Committee (MPC) is slated to trim its policy rate by 200 basis points (bps) in its meeting on November 4, 2024, as inflation has been steadily declining in recent months.

Speculations have been doing rounds of a policy rate cut of up to 400 basis points by December, as according to analysts the room for easing exists, which has also rekindled foreign investors' interest in the country’s capital market.

Inflation dropped to 6.9% year-on-year in September 2024, the lowest since January 2021, down from 9.6% in August, driven by the high base effect, easing commodity and energy markets, and a stable currency, according to the Pakistan Bureau of Statistics (PBS).

In September, the SBP slashed the key policy rate by 200bps to 17.5% from 19.5%, citing a steep fall in both headline and core inflation over the past two months.

This is a developing story and is being updated with more details.