LAHORE (Web Desk) – The Pakistan Stock Exchange (PSX) posted solid gains on Monday, with mid-sized stocks stealing the spotlight as investors pinned their hopes on possible interest-rate cuts, a manageable current-account gap and improved access to low-cost funding.
The benchmark KSE-100 Index closed at 187,761.69 points, marking an increase of 2,662.86 points or 1.44% from the previous session’s close of 185,098.83. The market moved within a range of 186,127.35 to 187,882.04 points, reflecting upbeat trading throughout the day.
Analysts said confidence returned to the trading floor as expectations grew that lower rates could ease financial pressure on businesses and give the market fresh momentum.
“Mid-cap stocks are seeing renewed interest due to hopes of rate cuts, a controlled current-account deficit, debt-restructuring expectations and the prospect of affordable funding through a panda bond,” said AAH Soomro, an independent market analyst. “This trend is likely to hold in the near term.”
A poll conducted by Topline Research ahead of the State Bank of Pakistan’s (SBP) Monetary Policy Committee meeting on January 26 revealed that most participants are anticipating a reduction in policy rates.
More than half expect a 50 basis point cut, while a smaller group sees a deeper reduction of up to 100 basis points. One-fifth of respondents believe the central bank may keep rates unchanged.
On the reserves front, SBP data showed foreign exchange holdings climbed by $16 million to $16.072 billion in the week ending January 9. Combined liquid reserves, including those held by commercial banks, stood at $21.248 billion.
The central bank forecast the current-account deficit for FY26 to remain between 0% and 1% of GDP and projected reserves to rise to $17.8 billion by June 2026, backed by expected official inflows.
Meanwhile, the Ministry of Finance announced plans to digitise up to $2 billion of domestic government debt in the first phase, aiming to modernise the debt market and attract a wider pool of investors.
The PSX had finished last week on a positive note, adding 689 points week-on-week. Although market swings remained sharp, sentiment improved on easing regional risks, declining Pakistan Investment Bond yields and ongoing reform signals.
However, average daily trading volume dropped by nearly a quarter to 1.2 billion shares.