The Pakistan Stock Exchange (PSX) saw a strong bullish momentum on Monday morning as investors grew optimistic about an expected interest rate cut in the upcoming Monetary Policy Committee (MPC) meeting. The benchmark KSE-100 Index surged during the early trading session, coming within a hair’s breadth of the significant 140,000 level, driven by broad-based buying in key sectors.
At 9:35am, the KSE-100 Index reached 139,988.07 points, marking a gain of 780.79 points, or 0.56%, compared to the previous close. This early rally reflects growing market confidence, with investors factoring in possible monetary easing and improved macroeconomic indicators.
Sector-Wise Buying Supports the Rally
Investor sentiment was particularly bullish across several index-heavy sectors. Notable gains were recorded in:
- Automobile assemblers
- Commercial banks
- Oil and gas exploration companies
- Oil marketing companies (OMCs)
- Refineries
Prominent stocks such as Pakistan Refinery Limited (PRL), Attock Refinery Limited (ARL), Mari Petroleum (MARI), Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL), Pakistan Oilfields Limited (POL), Pakistan State Oil (PSO), Sui Southern Gas Company (SSGC), and Sui Northern Gas Pipelines Limited (SNGPL) were all trading in the green.
This broad-based buying suggests institutional and retail investors are positioning themselves ahead of the State Bank of Pakistan’s monetary policy announcement, which many expect will include a cut in the policy interest rate to boost economic activity.
Previous Week Ends on a Positive Note
Last week, the KSE-100 Index displayed range-bound behavior but ultimately closed with a weekly gain. The market added 610 points or 0.44% week-on-week (WoW), ending at 139,207 points. The modest upward trend was attributed to:
- Anticipation of monetary policy easing
- Corporate earnings season
- Positive macroeconomic cues
Investors remained cautious but hopeful, with market participants assessing inflation data, currency stability, and fiscal developments.
Global Stock Markets React Positively to US-EU Trade Deal
The bullish sentiment at PSX was further supported by strong cues from international markets, particularly after a framework trade agreement between the United States and the European Union (EU).
Under the deal, the US agreed to impose a 15% tariff on most EU goods—half the originally threatened rate. The announcement comes just a week after the US reached a trade deal with Japan, easing tariffs on auto imports. Both agreements have helped stabilize global trade tensions ahead of an August 1 deadline set by US President Donald Trump.
These developments have sparked positive momentum in global equity markets:
- S&P 500 futures rose 0.4%
- Nasdaq futures gained 0.5%
- European stock futures surged nearly 1%
- The euro strengthened against the dollar, sterling, and yen
In Asia, the MSCI Asia-Pacific index (excluding Japan) edged up 0.27%, nearing a four-year high, while Japan’s Nikkei slipped 0.8% after hitting a one-year high the previous week.
US-China Talks in Stockholm Fuel Trade Optimism
Trade optimism was further buoyed by news that US-China negotiations are set to continue in Stockholm, with hopes of extending the ongoing 90-day truce between the world’s two largest economies. Global investors are closely watching these discussions, as any resolution could inject further energy into both developed and emerging markets.
Outlook for PSX
The outlook for the Pakistan Stock Exchange remains optimistic, particularly if the State Bank of Pakistan (SBP) follows through with an interest rate cut in its upcoming policy announcement. Such a move would lower borrowing costs, stimulate private sector investment, and boost corporate profitability—factors that typically lead to increased investor interest in equity markets.
However, analysts also caution that external risks such as geopolitical developments, foreign exchange volatility, and global commodity prices could still influence investor sentiment. Moreover, the corporate earnings season will be another important factor in determining the market’s trajectory in the coming weeks.
