Positive Momentum Returns to PSX Amid Rate Cut Expectations

The Pakistan Stock Exchange (PSX) saw a resurgence of positive sentiment on Wednesday, fueled by anticipation of a reduction in the policy rate during the Monetary Policy Committee (MPC) meeting scheduled for later in the day. During the trading session, the KSE-100 Index, a key market indicator, increased by more than 500 points.

Mid-Day Market Update

As of 12pm, the KSE-100 Index was recorded at 138,471.20, reflecting an increase of 506.39 points, or 0.37%.

Sector Performance

Purchasing activity was evident in significant sectors, including automobile manufacturers, cement, commercial banks, oil and gas exploration firms, power generation, and the refinery industry. Key stocks such as HUBCO, NRL, OGDC, POL, MEBL, UBL, and HBL showed positive trading results.

SBP’s Monetary Policy Decision

The State Bank of Pakistan’s (SBP) MPC is convening today (Wednesday) to deliberate on critical economic factors and determine the Monetary Policy.

During the previous assembly on June 16, 2025, the Committee decided to maintain the policy rate at 11%, due to expectations of rising inflation in the coming months. A majority of market experts foresee a rate decrease of 50 to 100 basis points, pointing to a current account surplus and expanding foreign exchange reserves.

Previous Day’s Market Performance

On Tuesday, the PSX underwent a fluctuating session, with initial bullish trends reversing into substantial selling pressure, which led to key indices falling significantly by the market close. The KSE-100 Index concluded at 137,964.82 points, representing a steep drop of 1,415.24 points, or 1.02%.

Global Market Overview

On a global scale, Asian stock markets saw modest gains on Wednesday, with investors exercising caution after trade discussions between the US and China concluded without major agreements, and ahead of the Federal Reserve’s policy announcement.

MSCI’s broadest index of Asia-Pacific stocks excluding Japan rose by 0.3%, driven by gains in Taiwanese stocks. This followed a session where US stocks experienced slight losses as traders prepared for a series of corporate earnings reports.

Australian stocks increased by 0.7%, while Japan’s Nikkei stock index fell by 0.03%, and Hong Kong’s Hang Seng Index declined by 0.4%. The euro experienced a slight recovery from a one-month low, increasing by 0.2% to $1.1564, as markets considered the EU’s trade agreement with the Trump administration.

Market participants are bracing for several central bank decisions, important economic data releases, and corporate earnings reports in the coming days, culminating in US President Donald Trump’s tariff deadline on August 1.

The Federal Reserve is anticipated to keep interest rates steady at its upcoming policy meeting on Wednesday, although some central bank officials might express dissent in favor of lower borrowing costs.