Pakistan stock market rallies to historic high after electricity price cut

Pakistan Stock Exchange rose 1.48% during intraday trade on Friday reaching an all-time high of 120,000 points after inflation fell to a five-decade low and electricity prices for both residential and industrial users were reduced.

The market ignored the harsh reality of the USA's "Liberation Day", slapping import tariffs across the globe. Analysts stated that a few countries were punished harshly after higher duties were imposed on them as the goods from the region, especially from China, was higher compared to other countries.

However, the government's landmark decision to cut electricity outweighed the negative decision.

The government on Thursday slashed the electricity prices for residential users, reducing them by PKR 7.41 to PKR 34.37, while for industrial users it was reduced by PKR 7.59 to PKR 40.60.

In June, rates for both groups were PKR 48.70 and PKR 58.50 per unit, respectively.

Another factor which helped boost the sentiment was the inflation rate which eased to 0.7.%.

Analysts were of the opinion that with electricity rate having weightage of nearly 5% in overall basket, in coming months where inflation is likely to soar with ending of base year, cut in electricity rate would soften the inflation rate.

This step might help the State Bank of Pakistan to cut interest rate once again from earlier stance of status quo.