The Pakistan Stock Exchange (PSX) surged beyond the 57,000-point mark, driven by investor confidence following the International Monetary Fund's (IMF) staff-level agreement on the initial review of a $3 billion stand-by arrangement.

The PSX's main index, the KSE-100 Index, reached an intraday peak of 57,110.62 points, closing at 57,059.19 points, marking a 0.67% increase from the previous day.

This bullish trend underscores the growing allure of the PSX compared to the stagnant real estate sector, which has experienced price declines in some instances. The excessive focus on real estate, considered a safe investment amidst economic uncertainties, has hindered progress in other sectors.

The rise in stocks is anticipated to dissuade investment in safer currencies like the dollar and commodities such as gold.

Pakistan's historically low stock market participation is attributed partly to the perceived ease of profit generation from real estate, gold, and foreign currency. This mindset has diverted attention from critical sectors like manufacturing, research, and innovation, imperative for sustained economic growth.

Investing in the stock market not only benefits individual investors but also encourages listed companies to expand, fostering job creation and addressing escalating unemployment rates.

Despite soaring inflation and interest rates impacting Pakistan's economy, the upward movement of the PSX suggests investors may anticipate a market correction through profit-taking. Nonetheless, analysts speculate the KSE-100 Index could reach new highs, possibly between 58,000 and 60,000 points.

The market's future trajectory hinges on investor sentiment towards potential further stock price increases, considering the current undervaluation compared to the peak in 2017.

Local investors are optimistic about potential interest rate stability due to declining inflation and favorable IMF talks. The successful IMF program review is anticipated to pave the way for state-owned enterprises (SOEs) privatization, a pivotal requirement within the agreement.

Islamabad has already adhered to IMF directives by raising fuel, power, and gas prices while reducing subsidies to alleviate the fiscal deficit. The next phase involves privatizing underperforming SOEs.

Other contributing factors to the recent stock market upsurge include improved macroeconomic indicators, stringent measures to curb smuggling, and robust performance in the agriculture sector, especially with bumper rice and cotton crops.