ISLAMABAD: The Pakistan Stock Exchange (PSX) soared to an unprecedented level on Tuesday, with the benchmark KSE-100 Index crossing the 149,000-point mark for the first time in history. The historic rally reflects surging investor confidence, fueled by easing inflation and growing expectations of monetary policy relaxation.
KSE-100 Sets New Benchmark
The KSE-100 Index gained 1,171 points in a single session, closing at 149,367 points. Earlier in the day, the index had already climbed 595 points, reaching 148,791 points before pushing further into record territory. Market watchers described the surge as a continuation of the bullish momentum that has gripped the bourse in recent weeks.
Investor Confidence and Economic Outlook
According to analysts, the latest rally is being driven by optimism over stable economic policies, declining inflationary pressures, and prospects of interest rate cuts. Improved investor sentiment—both local and foreign—has further fueled market activity, with traders betting on sustained growth in the months ahead.
Inflation Trends Show Relief
A report by Topline Securities, a leading economic think tank, projected that inflation in Pakistan is likely to ease to between 3.75% and 4.25% in August 2025. The monthly rise is expected to remain modest at around 0.3%, a stark contrast to last year’s double-digit price hikes.
For context, inflation stood at 4.07% in July 2025, while in August 2024 it was nearly 9.63%. Looking forward, Topline forecasts that annual inflation will stabilize between 6% and 7% by the end of the current financial year, broadly in line with the State Bank of Pakistan’s forecast of 5% to 7%.
Prospects of Interest Rate Cuts
With inflation cooling, analysts believe the State Bank of Pakistan now has scope to cut its benchmark policy rate. Topline predicts a 50 to 100 basis point reduction in the coming months, with rates potentially falling to 10% by December 2025. Such a move would lower borrowing costs for businesses and households, providing further impetus to economic activity.
Commodity Prices: What May Rise and Fall
The think tank also flagged potential shifts in commodity prices for August. Items such as transport, diesel, tomatoes, onions, and eggs are expected to become more expensive. Conversely, consumers may find some relief as prices of fresh fruits, sugar, and chicken are projected to decline.
A Record-Breaking Moment
The PSX’s historic performance marks a significant milestone for Pakistan’s financial markets. With inflation easing, interest rate cuts on the horizon, and investor sentiment improving, analysts suggest that the bourse could continue to chart new highs—provided macroeconomic stability is maintained.
