The Pakistan Stock Exchange (PSX) saw a significant boost on Monday, with the benchmark KSE-100 Index rising by more than 1,800 points, marking a 1.78% increase.

By 12:09 pm, the index reached 103,195 points, up from 101,357 points at the close of the previous trading session.

The positive momentum comes as investors show optimism regarding the expected reduction in inflation for November, which has been a key factor in driving market sentiment.

Experts believe that if inflation falls below 6 percent, it could set the stage for further monetary policy easing, which would likely benefit the stock market.

Bullish sentiment

Experts noted that the recent drop in interest rates and a favorable inflation outlook have contributed to renewed investor confidence in the market.

The reduction in inflation is expected to pave the way for even lower interest rates in the coming months, possibly dipping into single digits next year. This shift could enhance the valuation of stocks, particularly in sectors like automobiles, which have already seen a positive response.

Data reveals that auto sales, which had been declining, are now experiencing a recovery. In October, vehicle sales increased by 27 percent on a month-to-month basis and surged by 112 percent compared to the same month last year.

Market outlook

Experts suggest that retail investors should focus on long-term investments rather than reacting to short-term market fluctuations. By investing small, consistent amounts each month, investors can benefit from long-term compounding while minimizing risk exposure.