The stock market continued its record-breaking streak on Friday, surpassing the 109,000-point mark, fuelled by improving macroeconomic fundamentals, including a rise in Pakistan’s foreign reserves.

The Pakistan Stock Exchange (PSX) continued its record-breaking streak on Friday, with the KSE-100 Index surging 1,239.12 points, or 1.14%, to hit a new intraday high of 109,478.08.

This remarkable rally reflects a week of rapid growth for the PSX, which crossed the 100,000 mark just seven days ago.

Pakistan’s total liquid foreign reserves reached $16.6 billion as of November 29, 2024, according to the State Bank of Pakistan (SBP).

These reserves include $12 billion held by the SBP, which increased by $620 million during the week, driven by an official inflow of $500 million from the Asian Development Bank (ADB).

Additionally, the Saudi Fund for Development (SFD) extended the term for a $3 billion deposit maturing on December 5, 2024, by another year.

This extension followed a meeting between Prime Minister Shehbaz Sharif and Saudi Crown Prince Mohammad Bin Salman during the “One Water Summit” in Riyadh.

Meanwhile, another reason for the market’s rise is the inflation rate, which dropped to 4.9% in November, its lowest level since 2017, providing room for further monetary easing. This marks a sharp decline from last year’s historic high of 38% and is well below the SBP’s target range of 5-7%.

Analysts widely expect the SBP to cut interest rates by at least 200 basis points in its December 16 meeting, which would bring the total reduction to 900 bps since June.

As the PSX approaches the 110,000-point mark, market analysts remain optimistic about continued growth.

With robust macroeconomic indicators, rising reserves, and the likelihood of a significant rate cut, the capital market is positioned for sustained momentum heading into the final weeks of 2024.