PSX gains despite mixed macros

KSE-100 index hits 171,404 as SBP surprises market with 50bps rate cut

KARACHI:

The KSE-100 index of the Pakistan Stock Exchange (PSX) extended its upward momentum, rising 1,540 points (0.91%) week-on-week to close at 171,404, boosted by the State Bank of Pakistan's surprise 50-basis-point (bps) rate cut to 10.5%.

Market sentiment was further supported by a modest current account surplus of $100 million in November 2025, reversing a $291 million deficit in October, even as the cumulative deficit for 5MFY26 reached $812?million.

On a day-on-day basis, after multiple unsuccessful attempts, the PSX finally managed to close above the key 170k level on Monday, with the index ending the session at 170,741, up 877 points, or 0.52%.

Following the SBP's surprise 50bps rate cut, the bourse also delivered an unexpected move by closing in the red against positive market expectations. The KSE-100 settled at 170,447, down 294 points, or 0.17%.

The market experienced consolidation on Wednesday, when the index moved in both directions before closing on an almost flat note at 170,314, down 133 points, or 0.08%.

Next day, the PSX posted a strong bullish performance as the index hit a fresh all-time high of 171,961, gaining 1,646 points, or 0.97%.

The market witnessed profit-taking on Friday ahead of the rollover week beginning Monday. The KSE-100 closed at 171,404, down 556 points, or 0.32%.

Arif Habib Ltd (AHL) noted that the KSE-100 index increased from 169,865 last week to 171,404 this week, posting a gain of 1,540 points (0.91% WoW). The positive sentiment was driven by the 50bps policy rate cut on Monday.

In Nov'25, AHL mentioned, a current account surplus of $100 million was recorded compared to a surplus of $709 million in Nov'24 and a deficit of $291 million in Oct'25. The current account deficit reached $812 million in 5MFY26.

Pakistan witnessed net foreign direct investment (FDI) of $180 million during Nov'25 compared to inflows of $179 million in Oct'25. During the week, T-bill auction raised Rs445 billion, exceeding the Rs400 billion target, amid total bids of Rs2,488 billion. Cut-off yields fell by 25-70?bps across all tenors in the first Pakistan Investment Bond (PIB) auction following the 50bps policy rate cut, and the largest allocation of Rs116.9?billion went to the two-year PIB.

Power generation remained stable with negative fuel cost adjustment in Nov'25. Generation in the month reached 8,050 gigawatt hours (GWh), below the reference generation of 8,133 GWh.

Auto financing increased by 35.5% year-on-year (YoY) to Rs318 billion in Nov'25, up from Rs235 billion in Nov'24. During November 2025, industry urea offtake reached its highest level for any November since 2010, driven by higher manufacturer discounts and strong Rabi season demand. Resultantly, the industry's urea inventory declined to 1.14 million tons in Nov'25 compared to 1.40 million tons in Oct'25.

Meanwhile, the SBP-held reserves rose by $1.3 billion to $15.9 billion, while commercial bank reserves increased by $0.2 billion to $5.2 billion, AHL added.

Syed Danyal Hussain of JS Global noted that the KSE-100 index extended its upward momentum during the outgoing week, closing at 171,404, up 0.9% WoW, while average daily turnover dropped by 5% WoW. Sentiment strengthened after the SBP surprised the market with a 50bps cut in the policy rate to 10.5%. The central bank noted that inflation remained broadly stable, supported by moderate global commodity prices and well-anchored inflation expectations under a prudent monetary stance, he said.

On the external front, Pakistan posted a current account surplus of $100 million in Nov'25, reversing a deficit of $291 million in Oct'25, largely due to a 15% decline in imports. However, the C/A recorded a deficit of $812 million in 5MFY26, compared to a surplus of $502 million in the same period of last year.

Hussain pointed out that large-scale manufacturing output showed signs of recovery, rising 8.3% YoY in Oct'25, taking cumulative growth for 4MFY26 to 5% YoY. In contrast, FDI declined by 25% YoY to $927 million in 5MFY26. In other developments, Pakistan approached the ADB to seek additional financing to refinance Rs1.7 trillion power-sector circular debt at more favourable terms, he said.