PSX Hits Milestone Amid Optimism Over Interest Rate Cuts

The Pakistan Stock Exchange (PSX) benchmark index reached a milestone of 105,473.56, with the KSE-100 Index gaining 914.49 points (0.87%). This surge is largely attributed to the expectation of a significant interest rate cut, with a 200 bps reduction anticipated. The State Bank of Pakistan's (SBP) target range for inflation is 5-7%, and the current Consumer Price Index (CPI) inflation for November stands at 4.9%. The trade deficit in November was $1.589 billion, but exports increased by 12.57%. The real interest rates after the rate cut are expected to be 810 bps, which is within the historic average of 200-300 bps. These factors have collectively contributed to the optimism in the market, leading to the PSX surpassing the 105,000-point milestone.