PSX rallies to new record on rate cut talk

Index jumps 2,663 points as investors expect better corporate results

KARACHI:

The Pakistan Stock Exchange (PSX) made a robust start to the week as the benchmark KSE-100 index surged to a new record high on the back of renewed investor interest, underpinned by optimism about monetary easing.

Investors increasingly expect the State Bank of Pakistan (SBP) to announce a rate cut of at least 50 basis points in its upcoming review. Market participants believe that easing inflationary pressures, along with stabilising macroeconomic indicators, have strengthened the case for a shift towards a more accommodative monetary stance, prompting stock buying across key sectors.

During the session, the index moved between the intra-day low of 186,127 and high of 187,882. At close, the KSE-100 index recorded a surge of 2,662.86 points, or 1.44%, and settled at 187,761.69.

Arif Habib Limited (AHL) Deputy Head of Trading Ali Najib observed that the PSX extended its bullish momentum, with the KSE-100 index hitting another all-time high at 187,762, up 2,663 points.

Investors resorted to across-the-board buying as sentiment remained upbeat, supported by anticipation of better-than-expected corporate results and a policy rate cut in the upcoming meeting on January 26, following monetary easing signals from recent T-bill and PIB auctions.

On the corporate front, hydrocarbon reserves were discovered in the TAL block, with expected production of 1.37 million cubic feet per day of gas. MOL operates the block with a 10% stake, while PPL and OGDC hold 30% interest each, POL owns 25% and GHPL 5%.

Meanwhile, the State Bank reported a current account deficit of $244 million in December 2025, compared with surpluses of $454 million in December 2024 and $98 million in November 2025. For 1HFY26, the current account posted a deficit of $1,174 million. Additionally, there was net foreign direct investment (FDI) outflow of $135 million in December 2025.

Najib predicted that the market was likely to remain positive and may march towards new highs in the near term, with momentum supported by expectations of monetary easing and improved corporate earnings.

JS Global analyst Nawaz Ali commented that the bourse closed at a fresh all-time high of 187,762, gaining 2,663 points, driven by strong buying interest amid expectations of rate cut in the upcoming monetary policy meeting.

During the session, the index touched the intra-day high of 187,882 (+2,783 points) and low of 186,127 (-1,028 points). "Going forward, we advise investors to book profits at higher levels, while viewing any market dip as a buying opportunity, particularly in oil & gas and banking stocks," Ali added.

Topline Securities mentioned in its report that the local bourse extended its bullish run from last week, with investors firmly in the driving seat throughout the session. Investor sentiment remained upbeat, largely fuelled by rising expectations of an imminent rate cut.

Market participants increasingly priced in a 50-basis-point reduction in the upcoming monetary policy, which kept buying interest alive and underpinned broad-based gains. Engro Holdings, UBL, Hub Power, Fauji Fertiliser, Meezan Bank and Service Industries emerged as the top contributors, adding 1,554 points to the index, added Topline.

Overall trading volumes increased to 1.2 billion shares compared to the previous tally of 959.5 million. The value of traded shares stood at Rs63.8 billion.

Shares of 486 companies were traded. Of these, 278 stocks rose, 167 fell and 41 remained unchanged.

Bank Makramah was the volume leader with trading in 246.3 million shares, losing Rs0.58 to close at Rs5.45. It was followed by Pakistan International Bulk Terminal with 104.6 million shares, rising Rs1.66 to close at Rs22.59 and K-Electric with 63.3 million shares, gaining Rs0.15 to close at Rs6.55. During the day, foreign investors sold shares worth Rs1.1 billion, the National Clearing Company reported.