PSX rises amid anticipation of key economic policies

KSE-100 Index closes at 112,743.79 points, gaining 756.91 points, or 0.68%

By, Mirza Muhammad Hammas .

The stock market staged a recovery on Tuesday, as investors assessed fresh economic data and positioned themselves ahead of crucial monetary policy decisions.

Despite the recovery, trading remained constrained within a narrow range, with low volumes signaling persistent caution as market participants awaited key economic developments.

The Pakistan Stock Exchange’s (PSX) KSE-100 Index closed at 112,743.79 points, posting a gain of 756.91 points, or 0.68%, recovering from Monday’s sharp decline. The benchmark index touched an intraday high of 112,877.01 points, while the lowest level was recorded at 111,717.17 points.

Market experts noted that while inflation data provided some support, the optimism was tempered by the widening trade deficit.

“The market has remained range-bound for the last few days, and the lack of volumes is also a concern. The excitement of the CPI numbers yesterday was offset by the larger-than-expected trade deficit and neutralised the potential upside move,” said Ahfaz Mustafa, CEO of Ismail Iqbal Securities.

“The next catalyst in the market will be the monetary policy, followed by the IMF mission completion—these will help the market decide the next direction,” he added.

Pakistan’s inflation rate saw a sharp decline in February 2025, dropping to 1.5% year-on-year (YoY), marking the lowest level since September 2015, according to data from the Pakistan Bureau of Statistics (PBS).

Month-on-month, inflation decreased by 0.9%, contrasting with a 0.2% rise in January and no change in February 2024. The average inflation rate for the first eight months (July-February) of the current fiscal year stood at 5.85%, a stark drop from the 27.96% recorded in the same period last year.

Despite this positive development, Pakistan’s trade deficit surged to $2.3 billion in February, marking a 33.4% increase compared to $1.72 billion in the same month last year. Exports fell 5.57% to $2.44 billion, down from $2.58 billion a year earlier, while imports rose by 10% to $4.738 billion.

On a month-over-month basis, exports declined by 17.35% from $2.95 billion in January, while imports dropped by 9.9% from $5.26 billion in the previous month. Over the first eight months of the fiscal year, total exports increased by 8.17% to $22.02 billion, compared to $20.36 billion in the same period last year.

Meanwhile, Pakistan’s banking sector reported robust earnings for 2024, with listed banks posting a combined profit of nearly Rs600 billion despite a tax expense of Rs650 billion, according to brokerage firm Topline Securities.

Meezan Bank Ltd (MEBL) emerged as the most profitable bank, recording earnings of Rs101.5 billion, followed by United Bank Ltd (UBL) at Rs75.8 billion and MCB Bank Ltd (MCB) at Rs63.5 billion. Habib Bank Ltd (HBL) and Standard Chartered Pakistan Ltd (SCBPL) rounded out the top five with profits of Rs57.8 billion and Rs46.1 billion, respectively.

The PSX had begun the week on a weak note, with the KSE-100 Index plunging by 1,264.78 points, or 1.12%, to close at 111,986.89 points on Monday. Investors remained cautious ahead of the upcoming monetary policy meeting and the ongoing IMF review.