The stock market opened in a strong note on Tuesday, expanding profits after Pakistan’s state bank (SBP) delivered a reduction in interest rates higher than the expected interest rate to support the economy amid relaxation and geopolitical uncertainty.
The Pakistani Stock Exchange (PSX) reference index increased to an intraodam high of 115,093.10, earning 990.87 points or 0.87%, in the previous closure of 114,102,23. The low of the session was recorded at 114.203.13, it still reflects a increase of 100.9 points or 0.9%.
“The market is reinforced by a reduction in the SBP 100bps policy announced yesterday, signaling the repetition of monetary relaxation that only a minority expected,” said Amreen Soorani, head of Al Meezan’s investment research.
“In conjunction with the improvement of macroeconomic fundamental authorities and the cautious guidance of SBP monetary policy alongside the expected strong Forex inflows over the next two months, investor confidence seems to recover after a hectic April.”
On Monday, the SBP reduced the reference rate by 100 basis points to 11%, the most intense cut since June 2024, as inflation pressures were soft and at risk of US prices and regional tensions.
The move has caught most of the out -of -guard analysts, with many waiting for neither a change nor a moderate decrease in 50 Bps. The policy rate is now at the lowest level in three years, bringing cumulative cuts over the past 11 months to 1,100 basis points.
Meanwhile, the PSX was largely unchanged on Monday, with the KSE-100 index flying by 11.7 points to be installed at 114,102,23. The session had seen high levels of 114,552.21 and a low of 113,077.67, as investors awaited clearly from the Central Bank’s policy decision.
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