• KSE-100 index is recovered, closing at 114,037.79.
• Benchmark index wins 594 points or 0.52%.
• Intraday High at 114,319.62, low at 113,234.31.

The stock market experienced a recovery on Thursday, run by renewed purchase interest in the cement sector and expectations of a further interest rate reduction in the upcoming Monetary Policy Committee (MPC) meeting.

Pakistan Stock Exchange’s (PSX) Benchmark KSE-100 index got 594.36 points, or 0.52%, to close at 114,037.79, and recovered from the previous session loss. During the session, the index reached an intraday high of 114,319.62 and dipped to a low level of 113,234,31.

“Momentum is driven by the cement sector, partly because of the expectations of another interest rate in the upcoming MPC,” said Muhammad Saad Ali, director of research at Intermarket Securities Ltd.

“Yesterday’s Treasury Bills (T-Bills) auction reinforced hope for at least a 100-base point cut,” he added.

Dividends on T-bills fell in Wednesday’s auction, which additional fuel for expectations of monetary easing. The government raised RS326 billion and fell under RS350 billion. The yield is now at 11.58% for the three-month paper, 11.4% for six months and 11.38% for the 12-month.

The auction experienced a significant investor interest in which participation reached RS1.4 trillion against maturity worth the RS515 billion. Analysts believe this strengthens the market’s expectation of a 100-BPS cut under the State Bank of Pakistans (SBP) 27 January policy review as inflation continues to fall.

Pakistan’s Consumer Price Index (CPI) for January is expected to fall to 2.8%, its lowest level since November 2015, despite a month to month to 0.6%.

The average inflation rate for the first seven months of FY25 is expected to be 6.7%, significantly lower than 28.7% average in the same period last year. This trend supports the case for further monetary relief, which can provide additional stimulus to the stock market.

On Monday, the National Assembly was informed of the government’s plans to tackle structural inefficiencies in the tax system, tackle the undocumented economy and expand the tax base.

Prime Minister for Finance Ali Pervaiz Malik emphasized that reforms are a key priority in which Prime Minister Shehbaz Sharif approves a transformation plan for the Federal Board of Revenue (FBR). These reforms aim to improve tax compliance and improve the income collection mechanisms.

PSX closed sharply lower Wednesday when concern about tax law changed Bill 2024 continued to weigh on investor mood. The legislation that prohibits non-filers from acting beyond specified boundaries has given rise to fear among market participants.

The KSE-100 index fell by 1,598.82 points, or 1.39%, to close at 113,443.43. The index recorded an intraday high of 115,256.16 and a low low level of 113,359.38.

As investors are watching on January 27 -money policy review, Market Momentum is likely to be related to signals from SBP regarding interest rate adjustments.