Key Points:
- Benchmark index falls nearly 300 points after late-session selling
- Surprise SBP rate cut lifts market early, but profit-taking dominates close
- Index ends lower despite previous session’s record high
- Global risk-off mood weighs on equities
ISLAMABAD: Pakistan’s stock market closed lower on Tuesday as late-session selling erased early gains triggered by a surprise interest rate cut, reflecting cautious investor sentiment despite supportive monetary policy signals.
The benchmark KSE-100 Index opened on a strong footing after the State Bank of Pakistan reduced the policy rate by 50 basis points, pushing the index to an intra-day high of 171,922.60. Buying interest remained firm in the early hours, particularly in index-heavy stocks.
However, the momentum reversed in the latter part of the session as investors opted to book profits, dragging the index to an intra-day low of 170,191.98.
At the close, the KSE-100 Index settled at 170,447.29, down 294.05 points or 0.17 per cent from the previous session. Despite the decline, the index managed to hold above the previous close of 170,741.34 for most of the session before succumbing to selling pressure in the final stretch.
The pullback followed a strong performance on Monday, when the benchmark index gained 876.82 points, or 0.52 per cent, to close at a fresh all-time high of 170,741.35, buoyed by improving market sentiment and expectations of policy easing. Trading activity remained robust, with volumes clocking in at around 475.4 million shares, reflecting active participation across sectors. The total traded value stood at over Rs 36.2 billion, indicating sustained liquidity despite the late-session pullback.
The State Bank’s Monetary Policy Committee announced the unexpected rate cut on Monday, lowering the benchmark interest rate to 10.5 per cent with effect from December 16, 2025. Most market participants had anticipated no change, making the decision a positive surprise aimed at supporting sustainable economic growth while maintaining price stability.
Global market cues also weighed on sentiment. Asian equities declined sharply as investors turned cautious ahead of key US economic data, including employment figures that could influence the Federal Reserve’s policy outlook for next year. MSCI’s Asia-Pacific index excluding Japan fell around one percent, with major markets such as Tokyo and Seoul also closing lower.
Risk aversion extended across asset classes. Bitcoin hovered near a two-week low, gold edged higher toward multi-week highs, though it came down on Tuesday. Likewise, equity futures in the United States and Europe pointed to a weak opening.
Market participants said near-term direction at the PSX would depend on follow-through from monetary easing, corporate earnings expectations, and external developments, particularly signals from global markets and US economic data.
