The buying momentum at the Pakistan Stock Exchange (PSX) showed no signs of slowing down, with the benchmark KSE-100 Index closing at a record high on Tuesday.

The KSE-100 started the day on a positive note, reaching an intra-day peak of 91,358.15. However, some selling pressure in the final hours of trading reduced these gains.

Ultimately, the index closed at 90,864.09, marking an increase of 668.58 points, or 0.74%.

According to Topline Securities, the positive performance was largely fueled by strong corporate earnings that surpassed expectations, boosting investor confidence. Additionally, institutional buying played a significant role in supporting the market rally, contributing to the overall optimistic sentiment among investors.

The director of research at Chase Securities, Yousuf Farooq, attributed this bullish trend to consistent inflows from mutual funds shifting from fixed-income investments. He noted that the ongoing earnings season and reduced receivables in exploration companies have also contributed to the market’s upswing.

The chief investment officer at FRIM Ventures, Shahbaz Ashraf, highlighted several factors fueling the market’s surge, including lower inflation rates, decreased interest rates, strong profitability of PSX-listed companies, rupee stability, an optimistic external outlook, and attractive valuations. He emphasized that the PSX is among the top-performing markets globally in 2024.

The upcoming Monetary Policy Committee (MPC) meeting is expected to be a crucial trigger, with predictions of an interest rate cut of 200 to 250 basis points.

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The recent decline in fixed-income yields has also led to increased equity inflows, as stocks are perceived to be trading at compelling price-to-earnings ratios and dividend yields.

The director of equity at Arif Habib Limited, Tahir Abbas, pointed out that improved macroeconomic indicators, a stabilized exchange rate, and growing investor confidence due to favorable government policies have all played a role in the PSX’s impressive gains.

The easing of inflation and lower interest rates have further enhanced liquidity, prompting investors to explore new equity positions.