Pakistan’s equity market kicked off the new week with a powerful bullish streak, breaching the 133,000 level for the first time ever in intraday trading. This surge is fueled by optimism surrounding trade negotiations, robust macroeconomic stability, and a promising earnings outlook.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index climbed to an intraday high of 133,862.01, registering a gain of 1,912.95 points, or 1.45%. It also recorded a low of 132,467.12, reflecting a gain of 518.06 points, or 0.39%.
“The tariff deal and continued optimism are fueling the rally. Technically, we’ve breached multiple new highs. The earnings season is also around the corner, so all this is fueling the rally at the moment,” commented Ahfaz Mustafa, CEO of Ismail Iqbal Securities.
Investor sentiment remains strong, buoyed by falling inflation, strengthening foreign exchange reserves, and renewed capital inflows. Analysts anticipate this positive momentum will persist, supported by a shift in investment from fixed income to equities. This shift is primarily driven by higher taxation on alternative assets and lower yields in those segments.
The PSX concluded FY25 as the best-performing market in the region, delivering a remarkable 60% total return. This impressive momentum has seamlessly carried into FY26, propelling the KSE-100 Index into previously uncharted territory. Average Daily Traded Volumes (ADTV) have also surged by 31% Week-over-Week, indicating heightened investor participation and confidence.
The ongoing rally is significantly underpinned by robust macroeconomic confidence. Pakistan recently secured $3.4 billion in Chinese rollover and refinancing, along with an additional $1.5 billion from Middle Eastern lenders and multilateral partners. Furthermore, the State Bank of Pakistan’s (SBP) reserves stood at a healthy $14.51 billion as of June 30.
Inflation data has further reinforced this bullish sentiment. The Consumer Price Index (CPI) for June slowed to 3.2% year-on-year, bringing FY25’s average inflation to 4.5%. This marks a steep decline from 23.4% in FY24, opening up room for potential interest rate cuts, which would further enhance the investment appeal of equities.
