PSX hits record high; surges to 72,742 points

KARACHI: In a historic milestone, the Pakistan Stock Exchange (PSX) soared to an unprecedented level of 72,742 points on Friday, marking a remarkable achievement in the financial sector.

The 100-index witnessed a significant increase of 771 points, culminating at the same historic level.

This surge reflects the ongoing rally in the market, surpassing the coveted 70,000-point milestone.

Noteworthy performance was observed across various sectors including automobile, pharmaceuticals, and technology, underlining the robust and dynamic economic landscape.

Director of Research at Chase Securities Yousuf M Farooq told Dawn.com that the market is “building in expectations of a rate cut.”

The State Bank of Pakistan (SBP)’s Monetary Policy Committee (MPC) is scheduled to convene on April 29 to deliberate on the key interest rate policy. Last month, the committee opted for status quo, maintaining the key policy rate at 22 per cent for the sixth consecutive policy meeting.

According to a survey by Topline Securities conducted last week, 51 percent of participants anticipate no change in the policy rate, while the remaining 49 percent anticipate a rate cut.

“We believe that the SBP will maintain a cautious approach despite the encouraging trends and adopt a ‘watch and see’ approach until the inflation trend maintains its decline,” the brokerage firm stated.

Farooq highlighted a 1.1 per cent decline in the sensitive price index this week, contrasting with analysts’ expectations of inflation ranging between 17-18 percent.

“Lower interest rates translate into higher stock prices,” he noted.

Shahbaz Ashraf, Chief Investment Officer at FRIM Ventures, cited several factors summarizing the current market performance.

“The blue-chip sectors are unveiling a wave of encouraging results and payouts,” he stated.

Ashraf emphasized the anticipation surrounding the impending monetary policy announcement.

“Expectations are running high for a rate cut — even if symbolic — as inflation sees a sharp decline below the policy rate,” he added, noting that “real interest rates remain positive both in the present and in the foreseeable future.”

Head of Research at Arif Habib Limited Tahir Abbas echoed similar sentiments, stating, “The market is continuing its bullish momentum amid expectations of an interest rate cut in the upcoming monetary policy on Monday.”