Karachi, December 6, 2024: The Pakistan Stock Exchange (PSX) continued its unprecedented rally on Friday, crossing the 109,000-point milestone for the first time in its history, fuelled by improving macroeconomic conditions and a surge in foreign reserves.
The benchmark KSE-100 Index recorded an intraday high of 109,478.08 points before closing at 109,053.95, gaining 814.99 points or 0.75% from the previous close of 108,238.96. This capped a week of remarkable growth, during which the index surged by 7.6%, achieving its highest weekly return since April 2020.
Trading activity also reached historic levels, with the weekly average volume hitting 1.7 billion shares and the traded value amounting to Rs55 billion, reflecting robust investor confidence.
The rally is underpinned by strong macroeconomic fundamentals. Pakistan’s total liquid foreign reserves rose to $16.6 billion as of November 29, 2024, with the State Bank of Pakistan (SBP) holding $12 billion. This increase includes a $500 million inflow from the Asian Development Bank (ADB). Additionally, the Saudi Fund for Development (SFD) extended the term for a $3 billion deposit by another year, following Prime Minister Shehbaz Sharif’s meeting with Saudi Crown Prince Mohammed Bin Salman during the “One Water Summit” in Riyadh.
Inflation has also played a critical role in boosting market sentiment. November’s inflation rate dropped to 4.9%, the lowest since 2017, marking a sharp decline from last year’s record high of 38%. The lower inflation rate has opened the door for further monetary easing, with analysts predicting a 200-basis-point cut in interest rates during the SBP’s meeting on December 16.
The PSX’s historic rise, which began just seven days ago when it breached the 100,000-point mark, reflects growing optimism among investors. Analysts remain bullish, expecting the market to maintain its upward trajectory as Pakistan’s economic indicators continue to stabilize.
