PSX scales new highs on economic optimism
The rising expectation of an interest rate cut following a steep deceleration in inflation and a stable rupee on surging remittances drove the benchmark KSE 100 index to an all-time high in the outgoing week. Optimism about a further deceleration in CPI inflation in the current month and the expectation of positive talks with the IMF team next week, which would mark the start of formal negotiations for the new loan programme, fuelled aggressive value-hunting in the last two sessions of the outgoing week. Arif Habib Ltd (AHL) said market sentiment remained robust during the week, leading the index to close at its highest-ever level of 73,085.50 points. Saudi investors’ arrival in Pakistan to discuss investment prospects set the tone for positive momentum in the market. On the economic front, headline inflation clocked in at 17.3pc in April, compared to 20.7pc in the same period last year. Analysts expect CPI to further slow to 13-15pc in May, paving the way for a potential cut in the SBP’s policy rate in the upcoming Monetary Policy Committee meeting from the current 22pc.