Stock market rebounds as investors await key economic decisions

• KSE-100 Index gains 756.91 points, closes at 112,743.79.
• Benchmark index hits intraday high of 112,877.01, up 0.79%.
• Market low recorded at 111,717.17, down 0.24% intraday.
  

The stock market rebounded on Tuesday, as investors weighed the latest economic data and anticipated upcoming monetary policy decisions.

The market remained range-bound throughout the session, with thin volumes reflecting cautious sentiment ahead of key economic events.

The Pakistan Stock Exchange’s (PSX) KSE-100 Index closed at 112,743.79 points, posting a gain of 756.91 points, or 0.68%, recovering from Monday’s sharp decline. The benchmark index touched an intraday high of 112,877.01 points, while the lowest level was recorded at 111,717.17 points.

Market experts noted that while inflation data provided some support, the optimism was tempered by the widening trade deficit. 

"The market has remained range-bound for the last few days, and the lack of volumes is also a concern. The excitement of the CPI numbers yesterday was offset by the larger-than-expected trade deficit and neutralised the potential upside move,” said Ahfaz Mustafa, CEO of Ismail Iqbal Securities.

“The next catalyst in the market will be the monetary policy, followed by the IMF mission completion—these will help the market decide the next direction," he added.

Pakistan’s inflation rate saw a sharp decline in February 2025, dropping to 1.5% year-on-year (YoY), marking the lowest level since September 2015, according to data from the Pakistan Bureau of Statistics (PBS). 

Month-on-month, inflation decreased by 0.9%, contrasting with a 0.2% rise in January and no change in February 2024. The average inflation rate for the first eight months (July-February) of the current fiscal year stood at 5.85%, a stark drop from the 27.96% recorded in the same period last year.

Despite this positive development, Pakistan’s trade deficit surged to $2.3 billion in February, marking a 33.4% increase compared to $1.72 billion in the same month last year. Exports fell 5.57% to $2.44 billion, down from $2.58 billion a year earlier, while imports rose by 10% to $4.738 billion. 

On a month-over-month basis, exports declined by 17.35% from $2.95 billion in January, while imports dropped by 9.9% from $5.26 billion in the previous month. Over the first eight months of the fiscal year, total exports increased by 8.17% to $22.02 billion, compared to $20.36 billion in the same period last year.

Meanwhile, Pakistan’s banking sector reported robust earnings for 2024, with listed banks posting a combined profit of nearly Rs600 billion despite a tax expense of Rs650 billion, according to brokerage firm Topline Securities. 

Meezan Bank Ltd (MEBL) emerged as the most profitable bank, recording earnings of Rs101.5 billion, followed by United Bank Ltd (UBL) at Rs75.8 billion and MCB Bank Ltd (MCB) at Rs63.5 billion. Habib Bank Ltd (HBL) and Standard Chartered Pakistan Ltd (SCBPL) rounded out the top five with profits of Rs57.8 billion and Rs46.1 billion, respectively.

The PSX had begun the week on a weak note, with the KSE-100 Index plunging by 1,264.78 points, or 1.12%, to close at 111,986.89 points on Monday. Investors remained cautious ahead of the upcoming monetary policy meeting and the ongoing IMF review.