PSX Hits Record High, Closes Below 110,000 Points

The Pakistan Stock Exchange (PSX) witnessed a historic moment on Monday as the KSE-100 Index briefly crossed the 110,000-point mark, fueled by improving economic indicators and declining inflation. However, the market closed slightly below the milestone at 109,970.38 points, gaining 916.43 points (0.84%) during the day.

The session started with a dip of over 1,000 points due to concerns about potential new taxes on banks’ profits but quickly recovered as investor confidence grew. The index hit an intraday high of 110,358.85 points and a low of 107,902.66 before rebounding.

Market experts attributed the initial decline to government plans to increase taxes on banks’ earnings from investments in government securities. Muhammad Saad Ali, a research director at Intermarket Securities, said, “Banks, which led the recent rally, are seeing some pullback due to this news.”

Despite the concerns, overall optimism prevailed, supported by positive macroeconomic developments. Inflation dropped to 4.9% in November, the lowest since 2018, while Saudi Arabia extended its $3 billion deposit for another year, boosting Pakistan’s foreign reserves.

Prime Minister Shehbaz Sharif highlighted recent achievements, including a six-year low in weekly inflation (3.57%), rising remittances, and strengthened trade agreements. He reaffirmed the government’s commitment to economic stability, industrial growth, and job creation.

Finance Minister Muhammad Aurangzeb echoed this optimism, projecting remittances to surpass $35 billion by 2024-25 and addressing ongoing reforms, such as shutting down illegal petrol pumps and promoting local industries.

Looking ahead, the State Bank of Pakistan’s monetary policy meeting on December 16 is expected to shape market sentiment, with analysts anticipating a potential interest rate cut to sustain growth momentum.