The Pakistan Stock Exchange (PSX) experienced a significant rally on Tuesday, with the benchmark KSE-100 Index surging past the 104,000-point mark at 10:00am.

The market opened with a strong gain of 603 points, bringing the index to 103,878 points, and continued its upward momentum, climbing by another 759 points before surpassing the 104,000 milestone.

The surge comes on the back of growing investor confidence, driven by expectations of a reduction in inflation for November and the subsequent impact on interest rates. The KSE-100’s performance this week is part of a broader bullish trend, following the index crossing the 102,000-point threshold earlier in the week.

Positive economic indicators

Analysts attribute the continued upward movement to a combination of positive macroeconomic factors, including a reduction in bond yields, falling inflation, and lower interest rates. The State Bank of Pakistan's decision to cut interest rates has provided further liquidity to the market, driving interest in equities. Experts believe that the ongoing decrease in inflation, which is expected to drop below 6 percent in November, will pave the way for additional interest rate cuts in the coming months, potentially improving the valuation of stocks across various sectors.

The market’s bullish sentiment has also been bolstered by strong performance in key sectors, particularly in the automobile industry, which is witnessing a resurgence in sales.

According to recent data, vehicle sales saw a significant uptick, increasing by 27 percent on a month-to-month basis and 112 percent year-on-year in October 2024. This growth is seen as a sign of improving economic conditions and a rebound in consumer demand.

Experts continue to express optimism about the market’s future, with projections indicating the possibility of the KSE-100 Index surpassing 120,000 points by the end of next year, driven by further improvement in macroeconomic conditions.