PSX surges as SBP surprises with sharp interest rate cut

(Web Desk): The Pakistan Stock Exchange (PSX) started Tuesday on a strong note after the State Bank of Pakistan (SBP) announced a bigger-than-expected interest rate cut. The move is aimed at boosting the economy as inflation eases and geopolitical tensions remain uncertain.

The PSX’s main KSE-100 Index went up by 990.87 points, or 0.87%, reaching an intraday high of 115,093.10. The lowest point of the session was 114,203.13—still higher than the previous close of 114,102.23.

Market analysts said the rally was driven by the SBP’s surprise 100 basis point cut in its policy rate on Monday, lowering it to 11%. This is the sharpest cut since June 2024, and more than what most analysts had expected. Many had predicted no change or only a 50 basis point cut. The new rate is now at its lowest level in three years, with a total of 1,100 basis points cut over the past 11 months.

Amreen Soorani, Head of Research at Al Meezan Investment, said, “The market is responding positively to the unexpected rate cut. It signals the start of a new phase of monetary easing.” She added that better economic indicators and expected foreign currency inflows in the next two months are also helping to restore investor confidence.

On Monday, the PSX had remained flat as investors waited for the SBP’s decision. The KSE-100 index closed just 11.7 points lower at 114,102.23 after touching a high of 114,552.21 and a low of 113,077.67 during the session.