The Pakistan Stock Exchange (PSX) experienced a significant surge on Tuesday, with the KSE-100 index rising nearly 800 points in early trading. This upward movement followed the unexpected decision by the State Bank of Pakistan to reduce the policy rate by 100 basis points, pushing the rate to 11 percent. The move came as a surprise to many, as market expectations were for a 50 basis point cut.
By 10:15am, the KSE-100 index stood at 114,869.36, marking a 0.67 percent increase. Investor sentiment improved sharply as the central bank’s decision was seen as a potential catalyst for economic stimulation, reducing borrowing costs and potentially boosting corporate earnings in the long term.
Also Read: PSX Soars with a 2,800-Point Surge as Bullish Trend Returns
Buying activity was particularly strong in sectors such as automobiles, cement, banking, oil, and energy. Key gainers included HUBCO, PSO, OGDC, and MCB, all of which saw positive movement, reflecting the market’s optimism following the rate cut.
Despite the local optimism, global markets remained cautious, with Asian stocks moving within narrow ranges due to concerns over potential US tariffs. Analysts suggest that while the rate cut provides short-term support, the long-term market stability will depend on future economic reforms and budgetary measures in Pakistan.
