The Pakistan Stock Exchange (PSX) reached an all-time high on Friday after the United States officially reduced import tariffs on Pakistani goods. The move significantly boosted investor confidence and signaled improved trade ties between the two nations.
The PSX’s benchmark KSE-100 Index closed at 141,034.98 points, marking a gain of 1,644.56 points, or 1.18%, from the previous day’s close. During the session, the index hit an intraday high of 141,160.93 points.
Details of the US-Pakistan Trade Deal
The US government announced the revised tariffs, which will see Pakistan face a reciprocal tariff of 19%, a 10% reduction from the previous rate of 29%. This change is expected to help Pakistan maintain its competitiveness with trade rivals.
“We believe this deal will be neutral to Pakistan and will help [the] country remain competitive with direct competitors, albeit no significant advantage over peers,” Topline Securities said in a note to clients.
The trade deal follows months of negotiations that began in April. On Wednesday, US President Donald Trump also commented that the United States would partner with Pakistan to explore the country’s “massive oil reserves.”
Following the deal, Pakistan’s largest refiner, Cnergyico, is set to import its first-ever shipment of US crude oil. The company’s vice chairman, Usama Qureshi, told Reuters on Friday that it would import 1 million barrels from Vitol in October.
Other Factors Driving Market Rally
Another key factor contributing to the market’s strong performance was the State Bank of Pakistan (SBP)‘s decision to hold its key policy rate steady at 11% for the second consecutive meeting this week. This move went against market expectations of another rate cut.
In its policy statement, the SBP explained that the decision was based on elevated inflation risks, largely due to higher-than-anticipated energy price adjustments, particularly in gas tariffs. However, the SBP maintained that it expects inflation to stabilize within the target range in the coming months.
