A volatile session was witnessed at the Pakistan Stock Exchange (PSX) on Wednesday as investors awaited the State Bank of Pakistan (SBP) decision on monetary policy, with the benchmark KSE-100 Index settling with a gain of over 400 points.
The market kicked off on a positive note, hitting an intra-day high of 139,018.88.
However, selling pressure was observed in the latterpart of the trading session amid unconfirmed reports that the central bank would keep the policy rate unchanged, dragging the index to an intra-day low of 137,658.81.
At close, the benchmark KSE-100 Index settled at 138,412.25 level, a gain of 447.44 points or 0.32%.
In a key development, the State Bank of Pakistan (SBP) kept its policy rate unchanged at 11%.
“The Monetary Policy Committee (MPC) decided to keep the policy rate unchanged at 11% in its meeting today,” MPC said in a statement.
The committee noted that inflation in June 2025 decelerated to 3.2% y/y, led mainly by lower food prices, whereas core inflation also declined slightly.
“However, the committee noted that the inflation outlook has somewhat worsened in the wake of higher-than-anticipated adjustments in energy prices, especially gas tariffs.”
Most market analysts anticipate a rate cut of 50 to 100 basis points, citing a current account surplus and a rise in foreign exchange reserves.
On Tuesday, the PSX experienced a volatile session, as early bullish momentum gave way to heavy selling pressure, pulling key indices deep into negative territory by the close. The benchmark KSE-100 Index closed at 137,964.82 points, marking a sharp decline of 1,415.24 points or 1.02%.
Globally, Asian stocks rose modestly on Wednesday, with investors cautious after trade talks between the US and China ended without any substantive agreement and ahead of the Federal Reserve’s policy announcement.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3%, led by gains for Taiwanese stocks, after US stocks ended the previous session with mild losses as traders braced for a slew of corporate earnings.
Australian shares were up 0.7%, while Japan’s Nikkei stock index slid 0.03%, and Hong Kong’s Hang Seng Index skidded 0.4%. The euro edged up from a one-month low, rising 0.2% to $1.1564, as markets weighed the EU’s trade deal with the Trump administration.
Traders are preparing for several central bank decisions, key economic reports and corporate earnings during the next few days, culminating in US President Donald Trump’s August 1 tariff deadline.
The Federal Reserve is expected to leave interest rates unchanged at its policy meeting later on Wednesday, though it could see a rare dissent by some central bank officials in favour of lower borrowing costs.
