Buying rally continued at the Pakistan Stock Exchange (PSX) on Monday, with the benchmark KSE-100 Index gaining nearly 2,700 points amid expectations of a policy rate cut.
Bullish momentum was observed throughout the trading session, pushing the KSE-100 Index to an intra-day high of 187,882.04.
At close, the benchmark index settled at 187,761.69, an increase of 2,662.86 points or 1.44%.
“Investor sentiment remained upbeat, largely fueled by rising expectations of an imminent interest rate cut. Market participants increasingly priced in a 50bps reduction in the upcoming monetary policy, which kept buying interest alive and underpinned broad-based gains,” brokerage house Topline Securities said in its post-market report.
In a key development, Pakistan’s current account posted a deficit of $244 million in December 2025, data released by the State Bank of Pakistan (SBP) showed on Monday. The deficit followed a surplus of $98 million recorded in November 2025, which was originally reported to be at $100 million, and a surplus of $454 million in December 2024.
Analysts attributed the buying rally to expectations of a policy rate cut in the upcoming Monetary Policy Committee (MPC) meeting scheduled for January 26, 2026.
During the previous week, the PSX concluded the outgoing week on a firmer footing as a strong rebound in the final trading session helped the benchmark KSE-100 Index recover earlier losses triggered by elevated regional geopolitical tensions. The index closed at 185,098.83 points, posting a week-on-week increase of 689.16 points or 0.4%, after opening the week at 184,409.67 points.
Internationally, stock markets slid in Asia on Monday after President Donald Trump threatened to slap extra tariffs on eight European nations until the US is allowed to buy Greenland, pushing the dollar down against the safe-haven yen and Swiss franc.
A holiday in the US equity and bond markets made for thin trading and likely contributed to a 0.8% drop in S&P 500 futures and a 1.1% fall in Nasdaq futures.
For Europe, EUROSTOXX 50 futures and DAX futures both shed 1.3%, while FTSE futures lost 0.6%. Japan’s Nikkei fell 1.4%, and MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.3%.
Trump said he would impose additional 10% import levies from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, rising to 25% on June 1 if no deal is reached.
Major European Union states decried the tariff threats over Greenland as blackmail, and France proposed responding with a range of previously untested economic countermeasures.
The EU’s options include a package of its own tariffs on 93 billion euros of US imports that was suspended for six months in early August and measures under an Anti-Coercion Instrument that could hit US services trade or investments.
Analysts at Deutsche Bank noted European countries owned $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined, and might consider bringing some of that money back home.
Meanwhile, the Pakistani rupee strengthened against the US dollar, appreciating 0.01% in the inter-bank market on Monday. At close, the local currency settled at 279.92, a gain of Re0.03 against the greenback.
Volume on the all-share index increased to 1,198.65 million from 959.53 million recorded in the previous close. The value of shares declined to Rs63.80 billion from Rs69.46 billion in the previous session.
Bank Makramah was the volume leader with 246.26 million shares, followed by Pak Int.Bulk with 104.62 million shares, and K-Electric Ltd with 63.31 million shares.
Shares of 486 companies were traded on Monday, of which 278 registered an increase, 167 recorded a fall, and 41 remained unchanged.
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