KARACHI: The Pakistan Stock Exchange (PSX) experienced a significant rally on Monday, with the benchmark KSE-100 Index closing near the 110,000 mark, setting a new all-time high.

After an initial decline of over 1,000 points, primarily driven by a sell-off in the banking sector, the market regained momentum, reaching an intra-day peak of 110,358.85 points. By the close of trading, the index settled at 109,970.38, up 916.43 points or 0.84%. The market’s positive movement was supported by buying activity in key sectors, such as automobile assemblers, cement, fertilizer, oil and gas exploration, and oil marketing companies (OMCs).

Prominent stocks like ENGRO, OGDC, MARI, PPL, PSO, SSGC, SNGP, and HUBCO all ended in the green. On the other hand, the banking sector continued to face selling pressure, reflecting investor concerns over recent regulatory developments. Analysts attributed the market’s upward trend to improved macroeconomic indicators, particularly a decrease in the inflation rate to 4.9% in November. There is also growing speculation of a possible interest rate cut by the central bank, which further bolstered investor confidence.

However, uncertainty in the banking sector lingered due to the government’s formation of a committee to address the Advances to Deposit Ratio (ADR) issue, weighing on investor sentiment. The PSX’s record-breaking performance last week saw the KSE-100 index surge by 7,696.63 points or 7.6% week-on-week. Despite global market challenges, including a downturn in South Korea and political unrest in several countries, local market sentiment remained optimistic. The Pakistani rupee also showed stability, appreciating slightly by 0.01% against the US dollar, closing at 277.98.