PSX jumps as rate-cut expectations build ahead of SBP meeting

Pakistan’s stock market posted strong gains as investors positioned for a potentially easier interest-rate outlook and took comfort from external account signals and policy expectations. The KSE-100 Index closed at 187,761.69, up 2,662.86 points (1.44%), after swinging between an intraday high of 187,882.04 and a low of 186,127.35.

Market participants pointed to improving sentiment in mid-cap shares as anticipation grew around the State Bank of Pakistan’s upcoming Monetary Policy Committee meeting. An investment and economic analyst said optimism was being driven by expectations of rate cuts, a manageable current-account deficit, restructuring bets, and hopes of cheaper funding tied to a prospective panda bond initiative.

A pre-policy survey cited in the report indicated most respondents expected the central bank to reduce rates at the next meeting, with a range of views on the size of any cut. Separately, the central bank reported a modest rise in its foreign-exchange reserves for the latest week, while noting continued market purchases amid steadier current-account conditions supported by remittances.

The report also highlighted projections for the current-account balance and reserves through the fiscal year, along with a finance ministry plan to tokenise a portion of domestic government debt to broaden access and modernise public-debt markets. Despite recent volatility, last week ended with net gains as late buying offset earlier pressure, while lower bond yields and reform-related developments helped improve overall tone.