Pakistan’s benchmark share index gained more than 997.95 points, or appreciated by 1.24%, to close at 81,459.28 against the previous closing of 80,461.33, on expectations of further substantive monetary easing to spur economic growth.

The KSE-100 index hit a record high on Thursday, climbing 1.9% in intraday trading.

The central bank has cut its key policy rate by a total of 450 basis points to 17.5% in three successive policy decisions since late July, taking heart as inflation eases.

Pakistan’s stock market hit an all-time high of 82,003 points and was trading at 81,800 as of 1:25pm. It has gained some 13% since the government passed a economic reform-heavy budget in June aimed at securing a new International Monetary Fund programme.

“Today’s market rise is reflective of the t-bill auction that happened on Wednesday where the government rejected bids in all tenors indicating a large rate cut in November,” said Ismail Iqbal Securities CEO Ahfaz Mustafa.

Pakistan’s central bank said disinflation was faster than expected and there was a possibility that average inflation for the fiscal year ending mid-2025 would fall below its forecast range of 11.5–13.5%.

Pak-Kuwait Investment Company Head of Research, Samiullah Tariq, attributed the market gains to reduced concerns about foreign selling and the anticipation of further interest rate cuts.

Tariq noted that these expectations stem from the rejection of T-bill auctions the previous day and the Federal Reserve’s rate cut.

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“This coupled with the recent news of the IMF program and an expectation for inflation to slow to about 8% for September is all adding to the market making new intraday highs,” Mustafa added.

EFG Hermes Pakistan CEO Raza Jafferi said that the current account surplus in August, combined with expectations of additional interest rate cuts in upcoming monetary policies, is boosting domestic liquidity into equities and pushing the KSE-100 higher.

The PSX saw a significant surge on Wednesday, with the benchmark KSE-100 index rising nearly 800 points.

The IMF last week announced that its executive board will meet to discuss Pakistan’s $7 billion bailout programme on Sept 25 - allaying fears of a prolonged delay in much-needed funds for the country.

The South Asian nation struck a staff level agreement with the global lender in June, but board approval for the 37-month programme has been pending since then.