Karachi, January 2, 2025 – The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) reached a new record high on Thursday, January 2, 2025, closing at 117,120 points after a highly volatile trading session. The index gained 112 points from the previous day’s closing of 117,008 points, marking a 0.1% increase.
The trading session began on a strong note, with the KSE-100 index reaching an intra-day high of 118,368 points, driven by early optimism in the market. Investors were encouraged by improved macroeconomic indicators, including a notable decline in the inflation rate, which sparked hopes for a potential reduction in the policy rate. However, as the day progressed, profit-taking took hold, causing the index to retreat and reach an intra-day low of 116,858 points. Despite this pullback, the KSE-100 managed to settle higher at 117,120 points by the close of trading.
Analysts attributed the early buying momentum to positive economic data. Pakistan’s Consumer Price Index (CPI) for December 2024 recorded an encouraging 4.1%, the lowest level since April 2018. This decline in inflation has strengthened the expectations of further policy rate cuts by the central bank, which could provide a boost to market sentiment and consumption. The latest CPI data showed a decrease from 4.9% in November 2024, signaling that inflationary pressures may be easing.
As inflation continues to decline, experts believe that equities, particularly cyclical stocks, could remain an attractive investment option. The expected lagged impact of interest rate cuts is anticipated to gradually improve consumption and industrial output, which should benefit businesses in the coming months. This could provide a positive outlook for the KSE-100 index, which has already demonstrated resilience in the face of volatility.
Despite the volatility, the KSE-100 index’s performance reflects growing investor confidence in Pakistan’s economic stabilization efforts, particularly under the guidance of the International Monetary Fund (IMF). The reduction in inflation, combined with other economic reforms, is helping to foster a favorable environment for investment, particularly in the equities market.
Overall, Thursday’s trading session demonstrated the KSE-100’s ability to reach new highs, despite the challenges posed by market fluctuations, positioning the index as a key benchmark for investors seeking opportunities in Pakistan’s emerging market.