June 10, 2025 – Karachi: The Pakistan Stock Exchange (PSX) witnessed a strong bullish rally during early Tuesday trading, with the benchmark KSE-100 Index surging by 468.87 points, reaching 122,694.22 at 11:20am — marking a 0.38% increase in intra-day performance.
This uptick follows the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) maintaining the benchmark policy rate at 11%, a move widely anticipated by analysts and markets.
Key Sectoral Drivers of the Rally
The positive momentum was driven by broad-based buying in key sectors:
-
Automobile Assemblers
-
Cement
-
Commercial Banks
-
Oil and Gas Exploration Companies
-
Oil Marketing Companies (OMCs)
-
Power Generation
-
Refineries
Notably, index-heavyweights such as HUBCO, PSO, ARL, POL, PPL, MARI, and SNGPL saw robust demand, suggesting investor confidence in earnings stability and sectoral growth.
Policy Rate Held at 11%: SBP Prioritizes Stability
In its June meeting, the SBP’s MPC confirmed it would maintain the policy rate at 11%, continuing its wait-and-watch approach. The central bank cited the following reasons:
-
May inflation rose to 3.5% YoY, consistent with forecasts.
-
Core inflation declined slightly, indicating easing underlying price pressures.
-
External accounts remain stable, with controlled imports and steady remittances.
Market participants saw the status quo as a supportive signal, ensuring credit affordability without undermining macroeconomic stability.
Public Backlash Forces Government to Rein in FBR Arrest Powers, Simplifies Tax on Cash Deliveries
PSX Recap: Monday’s Mixed Session Set the Stage
Monday’s session ended on a muted note, with the KSE-100 posting a marginal gain of 81.79 points (0.07%), closing at 122,225.36. The modest performance reflected:
-
Profit-taking by short-term traders
-
Uncertainty ahead of the SBP rate decision
-
Caution over global political tensions
Geopolitical Headwinds: Global Markets React to Iran-Israel Conflict and Trump Statement
On the global front, investor sentiment turned risk-averse as Middle East tensions escalated sharply:
-
U.S. President Donald Trump called for an immediate evacuation of Tehran amidst the fifth consecutive day of Israel-Iran fighting.
-
Trump cut short his trip to the G7 summit and ordered the National Security Council into readiness.
-
Reports emerged that Iran is seeking a Trump-brokered ceasefire, causing volatility in crude prices and calming U.S. markets briefly.
The Iran-Israel air war — with Israeli strikes on uranium enrichment facilities and state media in Iran — has become the largest-ever direct confrontation between the two arch-rivals.
Global Market Snapshot:
-
S&P 500 Futures fell 0.46%
-
European Futures down 0.69%
-
Crude oil jumped more than 2% before stabilizing
-
Gold rose 0.5% as safe-haven buying returned
-
10-Year U.S. Treasury Yield slipped 2bps to 4.43%
-
Dollar strengthened against the euro, yen, and pound
The MSCI Asia-Pacific Index outside Japan saw marginal gains, while Hang Seng futures held steady despite the regional uncertainty.
What This Means for Pakistani Investors
The PSX rally reflects investor relief over monetary policy consistency and confidence in domestic corporate earnings. However, the external environment remains fragile, and any spillover from the Middle East crisis could:
-
Raise import costs (especially oil)
-
Pressure exchange rates
-
Increase volatility in foreign investment flows
Market players should closely monitor both the SBP’s forward guidance and regional geopolitical developments to adjust risk exposures accordingly.