The Pakistan Stock Exchange (PSX) started the new week on a record high, with the benchmark KSE-100 Index crossing the 133,000 mark for the first time ever in intraday trade.
Investors cheered a combination of economic optimism, upbeat earnings expectations, and enhanced trade relations, sending the market to new heights.
The KSE-100 Index jumped 1,421 points, or 1.08%, closing at 133,370.14 points, its own record breaking. In the session, the index touched an intraday high of 133,862.01 points, showing a net gain of 1.45%. Even the session low of 132,467.12 points indicated a positive trend, reflecting strong market confidence.
Market analysts say the rally is fueled by a mix of macroeconomic stability and new capital inflows. “Hopes over the tariff agreement and the coming earning season have given this rally boost,” said Ahfaz Mustafa, CEO at Ismail Iqbal Securities.
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The bullish trend of the equity market is also backed by declining inflation, increasing foreign exchange reserves, and sustained capital inflows from foreign investors. Fixed income instruments are coming under the pressure of increased taxation and declining yields, prompting many to turn their attention towards the equity market.
PSX has already closed FY25 as South Asia’s top-performing equity market with a whopping 60% total return. This upbeat trend has carried on into FY26 as well, as average daily traded volumes rose by 31% week-on-week, indicating increased investor participation and confidence.
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Macroeconomic optimism has been the driving force behind this escalation. Pakistan has recently acquired $3.4 billion in Chinese rollover and refinancing, as well as a further $1.5 billion from Middle Eastern and multilateral allies. These events have stabilized the economy and buoyed investor confidence.
The State Bank of Pakistan’s reserves climbed to $14.51 billion by the end of June, further reinforcing economic resilience. Meanwhile, inflation numbers offered more good news—Pakistan’s Consumer Price Index (CPI) for June cooled to 3.2% year-on-year, bringing the average inflation for FY25 down to just 4.5%, a sharp decline from 23.4% in FY24. This significant drop has increased the likelihood of interest rate cuts, making equities even more attractive for investors.
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