The Pakistan Stock Exchange (PSX) continued its bullish momentum on Tuesday, with investor confidence boosted by a cut in the policy interest rate and relief in petroleum prices.
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During early trading, the benchmark KSE-100 index surged by 610.24 points to reach 171,351.58 points, marking a gain of 0.36 percent compared to the previous close of 170,741.34 points.
Market sentiment was driven largely by the State Bank of Pakistan’s latest monetary policy decision announced a day earlier. The central bank reduced the policy interest rate by 50 basis points, bringing it down to 10.50 percent.
In its monetary policy statement, the State Bank said the decision was taken in view of evolving economic indicators. The cut surprised many analysts, as expectations were largely tilted toward maintaining the rate at 11 percent.
Earlier in May 2025, the central bank had already slashed the policy rate by 100 basis points. Since then, the rate had remained unchanged for several policy cycles before the latest reduction.
Adding to positive sentiment, the federal government also announced revised petroleum prices. According to a notification issued by the Ministry of Finance, the price of high-speed diesel was reduced by Rs14 per litre, while petrol prices were kept unchanged.
Market participants believe that lower borrowing costs and reduced fuel expenses could support economic activity, improve corporate earnings, and sustain momentum in the equity market in the near term.
