Investor sentiment surged on Tuesday as the capital rallied sharply, reacting to the State Bank of Pakistan’s unexpected monetary policy shift.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index rose to an intraday high of 115,093.10, gaining 990.87 points, or 0.87%, over the previous close of 114,102.23. The session’s low was recorded at 114,203.13, still reflecting an increase of 100.9 points, or 0.9%.
“The market is buoyed by the SBP’s 100bps policy rate cut announced yesterday, signalling a resumption of monetary easing that only a minority anticipated,” said Amreen Soorani, Head of Research at Al Meezan Investment.
“Coupled with improving macroeconomic fundamentals and the SBP’s cautious forward monetary policy guidance alongside expected strong forex inflows in the next two months, investor confidence appears to be recovering after a turbulent April,” she added.
The central bank’s surprise 100-basis-point interest rate cut, its largest since June 2024, lifted the KSE-100 index to an intraday high of 115,093.10, up 990.87 points or 0.87% from the previous close.
The move, which lowered the benchmark rate to 11%, a three-year low, defied market expectations and signalled a decisive turn toward economic stimulus amid easing inflation and persistent external risks.
Most analysts had predicted no change or a marginal cut, making the decision a bold statement by the SBP as it navigates cooling price pressures and geopolitical uncertainty.
The PSX closed largely unchanged on Monday, with the KSE-100 index edging down by 11.7 points to settle at 114,102.23. The session had seen highs of 114,552.21 and a low of 113,077.67 as investors awaited clarity from the central bank’s policy decision.
