ISLAMABAD, Jan 26 (ABC): The Pakistan Stock Exchange extended its rally on Monday as the benchmark KSE-100 Index crossed the 190,000 level for the first time. Investors remained cautious but optimistic ahead of the State Bank of Pakistan’s Monetary Policy Committee meeting.
Index crosses 190,000 level
By 12pm, the KSE-100 Index had gained 1,354.59 points, or 0.72 per cent, to reach 190,521.41. This came after the previous close of 189,166.82. During mid-session trading, the index moved within a narrow range.
The market touched a high of 191,032.73 and a low of 189,712.78. The movement showed steady buying interest rather than aggressive trading.
Rate cut hopes lift sentiment
Market participants said expectations of a policy rate cut were the main driver of sentiment. The benchmark interest rate currently stands at 10.5 per cent. Investors expect easing due to slowing inflation and a stable rupee.
Foreign exchange reserves have also improved in recent weeks. These factors have strengthened confidence ahead of the policy decision.
Treasury bill auction adds confidence
Sentiment improved further after the government lowered cut-off yields at its treasury bills auction on January 21. Most tenors fell to single-digit levels. This was the first such move in nearly four years.
Analysts said the auction outcome increased expectations of a rate cut later today.
Trading volumes remain strong
Market activity stayed healthy during the session. By noon, 171.3 million shares had been traded. Market value turnover stood at around Rs23.0 billion.
Analysts said afternoon trading will be important. They are watching to see if the index can hold its gains by the close.
Geopolitical calm supports market
Easing geopolitical tensions also supported equities. Signs of stabilisation on the US-Iran front helped improve investor confidence.
Huzaifa Riaz, Director at Mayari Securities (Pvt) Limited, said the market opened higher due to improved global sentiment. However, he noted that investors remained cautious ahead of the policy announcement.
He added that most market participants expect a 50-basis-point rate cut. A more dovish decision could further boost equities.
Positive outlook, risks remain
Analysts expect a positive tone in the near term. Investors are positioning for lower interest rates and continued reforms. Lower yields and improving external indicators are supporting risk appetite.
However, analysts warned that profit-taking near record levels could limit short-term gains.
Macroeconomic data strengthens case
Recent data has also supported market sentiment. In December 2025, the current account recorded a deficit of $244 million. Foreign direct investment posted a net outflow of $135 million.
Power generation rose 8.8 per cent year-on-year. Information technology exports reached a record $437 million, up 26 per cent.
Foreign exchange reserves increased to $16.1 billion. The rupee also appreciated 0.03 per cent to close at 279.86 per US dollar.
Market momentum builds
Over the previous week, the KSE-100 Index gained 4,068 points, or 2.2 per cent, to close at 189,167. Average daily volumes rose 8.7 per cent to 1.3 billion shares.
Analysts said sustained volumes show strong participation as the market moves to new highs.