Karachi: The KSE-100 Index of the Karachi Stock Exchange hit a new record high of 78,810 this June, ultimately settling at 78,445 after some profit-taking. This closing reflects a 3% gain for the month and contributes to a remarkable 26% return in the first half of 2024. With an exceptional annual return of 89% for the fiscal year, the KSE-100 marked a 21-year peak. The sectors leading the surge included banks, fertilizers, and power, each posting significant monthly gains.

According to JS Global, the market's robust performance was fueled by strong foreign investor confidence and strategic fiscal policies. Foreign buying for the first half of 2024 reached an impressive US$104 million, nearly matching the total for the entire previous year. The significant policy shift came with the State Bank of Pakistan's decision to reduce the policy rate by 1.5%, bringing it down to 20.5%, indicating a substantial easing of monetary policy. This change, following a prolonged period of rate stability, aligns with the decreasing consumer price index, which stood at 11.8% in May. Additionally, the anticipation of such monetary easing had been reflected in market behaviors as early as October 2023, with secondary market yields trading below the policy rate. Following the budget announcement, which avoided populist measures and included higher taxes, market sentiment was further bolstered, enhancing investor confidence in Pakistan's fiscal health and its prospects for securing an upcoming IMF deal.