PSX Crosses 120,000 as Market Rally Continues Amid IMF GDP Downgrade
Trading at the Pakistan Stock Exchange (PSX) kicked off on a strong note Monday, with the benchmark KSE-100 Index crossing the 120,000 mark in early trade. By 9:30am, the index had climbed to 120,001.07 points, reflecting a gain of 351.93 points or 0.29%.
This positive momentum follows last week’s historic surge, where the KSE-100 Index jumped by 12,474 points, marking an 11.6% week-on-week (WoW) increase—its strongest in five years. The rally was largely attributed to the announcement of a ceasefire between Pakistan and India, which bolstered investor confidence and market sentiment.
However, on the macroeconomic front, the International Monetary Fund (IMF) has revised its GDP growth forecast for Pakistan for FY 2024-25 downward to 2.6%, from its earlier projection of 3.2%. The adjustment is based on weaker-than-expected economic activity in the first half of the fiscal year and rising global uncertainty.
Global Market Snapshot
Internationally, markets were mixed. Asian equities opened the week in the red as concerns over China’s economic performance and rising global trade tensions took center stage:
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MSCI Asia-Pacific (ex-Japan): Down 0.2%
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Nikkei (Japan): Down 0.6%
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Chinese blue chips: Eased 0.4% amid disappointing retail sales and slowing industrial output.
Meanwhile, in the United States, the ripple effects of Moody’s credit rating downgrade continue to stir global markets. The agency cited concerns about the $36 trillion national debt, fiscal instability, and erratic policy decisions. The downgrade has:
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Raised US Treasury yields
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Pressured Wall Street futures
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Weakened the US dollar
Adding fuel to the uncertainty, US Treasury Secretary Scott Bessent downplayed the downgrade but warned of “maximum tariffs” on trade partners unwilling to strike balanced agreements. This tough stance comes as the White House pushes for a controversial tax reform package that could add up to $5 trillion to the national debt over the next decade.
This week, markets are also eyeing earnings reports from Home Depot and Target for insights into US consumer sentiment, which has been battered by inflation and the ongoing tariff conflict.
Conclusion
Despite global economic headwinds, the PSX continues to defy trends with robust investor activity and renewed optimism in local markets. However, the IMF’s GDP revision and persistent global uncertainties underscore the need for cautious optimism going forward.
