The Pakistan stock market continued its upward trend, reaching a new all-time high as the KSE-100 Shares Index soared to an intraday peak of 86,437 points, a gain of 773 points.
On Wednesday, energized by the Finance Minister’s announcement that inflation and policy rates were expected to decline further. These comments came as Pakistan’s economic landscape saw potential enhancements with Saudi Arabia’s impending $2 billion agreements with Pakistan, uplifting investor sentiment.
Senator Muhammad Aurangzeb, Federal Minister for Finance and Revenue, indicated on Tuesday potential further reductions in consumer price inflation and the central bank’s policy rates in the upcoming months. “The government’s rigorous efforts to stabilize the economy are now yielding results,” he stated.
Investor interest was particularly strong in sectors such as automobile manufacturing, commercial banking, fertilizers, and oil and gas, with significant activity in blue-chip stocks including Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), Oil and Gas Development Company (OGDC), Fauji Fertilizer Company (FFC), National Bank of Pakistan (NBP), and Habib Bank Limited (HBL).
Additionally, the Finance Minister announced the initiation of crucial structural economic reforms, predicting further easing of inflationary pressures and continuing the central bank’s stringent monetary stance. “Inflation has decreased to single digits and is expected to decline further,” Aurangzeb commented.
The Consumer Price Index (CPI)- based inflation rate also dropped to 6.9% year-on-year in September 2024, the lowest since January 2021, reflecting a decrease from 9.6% in August. The decrease was attributed to a high base effect, moderating commodity and energy markets, and currency stabilization.
In response to these favourable economic indicators, last month, the State Bank of Pakistan’s Monetary Policy Committee reduced the key policy rate by 200 basis points to 17.5% from 19.5%, citing significant reductions in headline and core inflation over the preceding months.
