The Pakistan Stock Exchange (PSX) on Thursday continued its renewed bullish momentum as it crossed the 138,000-point barrier.

The benchmark KSE-100 index rose by 1,785.25 points, or 1.31 per cent, to stand at 138,165.21 points at 11:57am, from the previous close of 136,379.96 points. The index closed at 138,665.49 points, up by 2,285.53 points or 1.68pc.

Awais Ashraf, research director at AKD Securities, said: “Investor optimism over a potential rate cut in the upcoming monetary policy, expected later this month, has strengthened following a decline in yields during yesterday’s PIBs (Pakistan Investment Bond) auction.

“A stable external account and easing inflation further support the case for bringing interest rates down into single digits,” he told Dawn.com.

The PSX had staged a modest recovery yesterday as investors resumed buying, encouraged by the formation of a high-level committee to address the business community’s concerns over the recently introduced taxation measures.

The development has helped the KSE-100 index gain momentum despite the July 19 strike call by the Karachi Chamber of Commerce and Industry to protest against the powers to arrest and prosecute businessmen introduced in the federal budget.

Investor confidence was also reinforced by Finance Minister Muhammad Aurangzeb’s recent briefing to Moody’s on Pakistan’s improved macroeconomic outlook and financial stability, bolstering optimism for a potential ratings upgrade in the credit rating agency’s upcoming review.