The Pakistan Stock Exchange (PSX) staged a strong rebound on Monday after two consecutive sessions of decline, recovering sharply as the State Bank of Pakistan (SBP) announced that interest rates would remain unchanged.

The decision brought relief to investors, sparking renewed buying across multiple sectors, as the market regained the 150,000-point limit.

Market regains momentum

After rumours of a possible hike in interest rates triggered a dip in previous sessions, confidence returned to the market following the SBP’s monetary policy announcement.

The benchmark KSE-100 Index surged by more than 1,100 points during intraday trading, eventually closing 945 points higher at 155,384.

High trading volumes and sector-wise buying

The day witnessed strong activity, with 860 million shares worth Rs32.8 billion traded during the session.

Heavy buying was seen in cement, banking, IT, and fertilizer stocks, as investors capitalized on the renewed momentum.

Investor sentiment improves

Market watchers said the unchanged interest rate decision provided much-needed stability. Investors, who had been rattled by speculation of monetary tightening, breathed a sigh of relief as the policy stance remained consistent.

At the start of the day, the PSX witnessed a strong rebound as the benchmark KSE-100 Index surged past the 155,000-point level, fueled by fresh buying across key sectors.

After days of profit-taking, investors turned bullish ahead of the State Bank of Pakistan’s Monetary Policy Committee meeting. During early trade, the index soared by more than 1,100 points, climbing as high as 155,463 points.

Buying spree across sectors

Index-heavy stocks such as ARL, HUBCO, MARI, POL, PPL, PSO, WAFI, HBL, NBP, and UBL all traded in the green, driving the rally.

The central bank had previously held the rate steady in its July 30, 2025 meeting, citing inflationary risks from higher energy tariffs. Analysts expect inflationary pressures to persist in the wake of recent flooding, but also noted supportive factors such as a stronger rupee and lower global oil prices.