KARACHI – The Pakistan Stock Exchange (PSX) set a new record on Tuesday as the market continued its upward momentum, pushing the KSE-100 Index to a historic high.
On the second day of this business week, trading commenced with an impressive surge of 1030 points, propelling the KSE-100 Index to a new peak of 171,772 points.
This represents a significant milestone in the market’s recent performance, reflecting investor confidence and market strength.
The continued upward trend of the stock market is seen as a positive sign for Pakistan’s economic outlook, with analysts attributing it to recent cut in policy rate by the State Bank of Pakistan (SBP).
A day earlier, the Monetary Policy Committee (MPC) of the central bank decided to decrease the policy rate by 50 basis points to 10.5 per cent. The decision comes into effect from December 16, 2025.
The MPC noted that inflation on average remained within the target range of 5 – 7 per cent during July-November FY26, though core inflation is proving to be relatively sticky. On balance, the inflation outlook remains broadly unchanged, mainly owing to the relatively benign global commodity prices and anchored inflation expectations, amidst a prudent monetary policy stance.
The Committee also assessed that economic activity continues to gain traction, based on robust improvement in key high-frequency indicators, including the anticipated increase in large-scale manufacturing in Q1-FY26. Nonetheless, the Committee noted that the global environment remains challenging, particularly for exports, which may have some implications for the macroeconomic outlook. In this backdrop, while ensuring the ongoing price stability, the MPC noted the available space to reduce the policy rate to support sustainable economic growth.
The Committee noted the key developments since its last meeting. First, the Labour Force Survey 2024-25 points to an increase in the unemployment rate from 2020-21, notwithstanding the faster growth in employment as compared to the previous survey. Second, despite sizable ongoing debt repayments, SBP’s FX reserves continued to increase, reaching above $15.8 billion with the receipt of $1.2 billion from the IMF after the successful completion of the EFF and RSF reviews.
