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PSX Extends Bullish Run on Record Inflation Drop, Policy Relief

KARACHI: The Pakistan Stock Exchange (PSX) maintained its upward momentum on Wednesday, with the benchmark KSE-100 Index scaling new highs as investor sentiment surged following the release of encouraging inflation data and favorable government policy measures.

The KSE-100 Index climbed 1,701.61 points, or 1.33%, to touch an intraday high of 129,901.03, while hitting a session low of 128,616.11, before closing well above Tuesday’s record of 128,199.42.

“Stocks are trading at new all-time highs amid upbeat CPI inflation data showing a 3.2% YoY figure for June 2025 and optimistic government projections of 5–7% inflation for FY2025–26,” said Ahsan Mehanti, MD and CEO of Arif Habib Commodities.

He added that the abolishment of excise duty on industrial power tariffs and a rise in global crude oil prices further supported the bullish sentiment.

Inflation Hits 10-Year Low

The rally was underpinned by official data released Tuesday showing headline inflation eased to 3.23% in June 2025, the lowest in nearly a decade. The sharp slowdown was driven by declining food, utility, and essential consumer prices.

Average annual inflation for FY2024-25 stood at 4.49%, bolstering expectations for further interest rate cuts by the State Bank of Pakistan, which has already slashed rates from a peak of 22% to 11%.

Food inflation fell to 2.56% in June, down from 3.07% in May, while perishable food prices remained in deflation for the sixth straight month at -10.55%, compared to -9.2% a month earlier.

Strong Start to FY2025–26

The market’s historic rise continued from Tuesday’s gains, when the KSE-100 Index jumped 2,572.11 points, or 2.05%, to close at 128,199.42, up from 125,627.31. That session saw an intraday high of 128,475.69 and low of 126,113.27, marking the highest-ever close for the index and setting a robust tone for the new fiscal year.

Analysts believe the easing inflation outlook, energy sector incentives, and positive trade projections are fueling investor confidence, with institutional and foreign investors playing a key role in driving the rally.

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