KARACHI: The Pakistan Stock Exchange (PSX) reached a new milestone on Friday, crossing the 120,000 mark for the first time as investors responded positively to a series of economic developments. These included significant reductions in electricity tariffs, a multi-decade low in inflation, and growing optimism regarding continued support from the International Monetary Fund (IMF).
The PSX benchmark KSE-100 Index surged to an intraday high of 120,796.67, gaining 1,858.56 points or 1.56%. The market opened strongly, continuing the momentum from Thursday’s post-Eid rally, which saw positive sentiment after the government’s announcement of electricity price cuts.
Ahfaz Mustafa, CEO of Ismail Iqbal Securities, highlighted the factors driving the rally: "The market made a new high yesterday on the back of electricity cuts and a permanent plan to resolve circular debt. This gave the market a shot of confidence. This was again coupled with a multi-decade low on inflation, and expectations of receiving the IMF tranche is driving the market to new highs."
Prime Minister Shehbaz Sharif’s announcement on Thursday to cut power tariffs by up to Rs7.69 per unit for domestic consumers and Rs7.59 for industrial units played a key role in boosting market sentiment. The reduction was part of an effort to alleviate economic burdens on households and enhance industrial competitiveness, and it received approval from the IMF under the $7 billion Extended Fund Facility (EFF).
In another positive economic indicator, inflation data released by the Pakistan Bureau of Statistics (PBS) showed that the Consumer Price Index (CPI) inflation for March 2025 had risen by only 0.7% year-on-year, down from 1.5% in February and significantly lower than the 20.7% recorded in March 2024. This marked the lowest inflation rate since December 1965, further bolstering confidence in the economy.
With the average CPI inflation for the first nine months of fiscal year 2025 standing at just 5.25%, compared to 27.06% in the same period last year, analysts now anticipate further monetary easing from the State Bank of Pakistan. The positive economic signals are expected to sustain the market’s bullish trend in the coming weeks.
