Investor optimism fuels Pakistan stocks to historic 100,000-point record

The Pakistan Stock Exchange (PSX) crossed the historic 100,000-point mark on Thursday, sparking celebrations among traders and investors. The index peaked at 100,540 points before closing at 100,182, reflecting a day of strong market activity.

The surge follows a period of turbulence when political unrest in Islamabad earlier this week caused the index to plummet by 5,240 points from its peak. However, as protests subsided, the market rebounded with a record 4,696-point rally on Tuesday, crossing five major levels—95,000 to 99,000—in a single session.

Over the past 17 months, the PSX has shown exceptional growth, gaining 60,000 points—a 150% increase from its June 2023 close of 40,220 points. Analysts have attributed this unprecedented rise to a mix of economic recovery, investor confidence, and policy changes.

Inflation has dropped to 7%, and interest rates have fallen from 22% in June to 15%, with further cuts expected in the December 16 monetary policy meeting. Lower rates have shifted liquidity from fixed-income instruments to equities, driving market participation.

Key economic indicators, including exports, remittances, foreign exchange reserves, and large-scale manufacturing, have shown significant improvement. Pakistan’s stock market is now among the best-performing globally, defying earlier fears of economic default.

The confidence boost stems partly from Army Chief General Asim Munir's meetings with Karachi’s business community over the last three months. Positive signals from international organizations, including the IMF and World Bank, and support from friendly nations have further stabilized Pakistan's economy.

Investors are now eyeing 2025 projections, which suggest interest rates could drop to single digits, bolstering mutual fund inflows into equities.