The Pakistan Stock Exchange (PSX) continued its record-breaking rally, with the benchmark KSE-100 Index surpassing the 133,000 level for the first time in intraday trading. The index peaked at 133,552.28, marking a gain of 1,603 points (1.22%), while the day’s low stood at 132,467.12, still up by 518 points (0.39%). Analysts linked the surge to optimism over trade negotiations, macroeconomic stability, and expectations of strong corporate earnings.
Ahfaz Mustafa, CEO of Ismail Iqbal Securities, noted, “The tariff deal and continued optimism are driving the rally. Technically, we’ve breached multiple new highs, and with earnings season approaching, the momentum is likely to sustain.” Investor sentiment remains strong due to declining inflation, rising foreign exchange reserves, and renewed capital inflows. The shift from fixed-income investments to equities—spurred by higher taxes on alternative assets and lower yields—has further boosted the market.
The PSX ended FY25 as the best-performing market in the region, delivering a 60% total return. This momentum has carried into FY26, with average daily traded volumes (ADTV) surging 31% week-over-week, signaling increased investor participation. The rally is supported by macroeconomic stability, including $3.4 billion in Chinese rollovers and refinancing, along with an additional $1.5 billion from Middle Eastern and multilateral lenders.
The State Bank of Pakistan’s reserves stood at $14.51 billion as of June 30, reinforcing economic stability. Additionally, June’s Consumer Price Index (CPI) slowed to 3.2% YoY, bringing FY25’s average inflation down to 4.5%—a sharp drop from 23.4% in FY24. This decline has raised expectations of potential interest rate cuts, further enhancing the appeal of equities and sustaining the market’s upward trajectory.