PSX surges to all-time high amid falling inflation
PSX surged to a new record high on Wednesday, buoyed by sharply lower inflation data and policy measures aimed at easing industrial costs.
The KSE-100 Index climbed to an intraday peak of 129,680.91, gaining 1,481.49 points, or 1.16%, from the previous close of 128,199.42. It touched a session low of 128,616.11 earlier in the day.
The rally follows official data showing headline inflation eased to 3.23% year-on-year in June, driven by falling food, energy and utility prices. The June reading marks the lowest annual inflation rate in almost a decade, reinforcing market expectations of further monetary easing by the central bank. The State Bank of Pakistan (SBP) has already reduced its benchmark interest rate from a historic high of 22% to 11%, in response to moderating inflationary pressures.
Read: Inflation falls sharply, undercuts tight policy
Average inflation for FY2024-25 stood at 4.49%, providing the strongest disinflationary signal since 2016. Much of the slowdown is attributed to a decline in food inflation, which fell to 2.56% in June, down from 3.07% in May.
Prices of perishable food items remained in deflationary territory for the sixth consecutive month, though the pace of deflation eased slightly to -10.55% in June from -9.2% in May.
The government's decision to abolish the electricity duty (ED) on industrial power tariffs also contributed to improved investor sentiment, particularly in manufacturing and export-driven sectors.
Additionally, a global uptick in crude oil prices spurred buying in energy and exploration stocks, further fuelling bullish momentum at the Pakistan Stock Exchange (PSX).
On Tuesday, the KSE-100 had already rallied by 2,572.11 points, or 2.05%, to close at 128,199.42, up from 125,627.31 a day earlier. It was the highest-ever closing level for the index and marked a robust start to the new fiscal year, which began on 1 July.
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