The Pakistan Stock Exchange (PSX) extended its record-breaking rally on Tuesday, driven by positive investor sentiment, an improving economic outlook, and aggressive buying by local funds. The benchmark KSE-100 Index climbed to an intraday high of 137,727.63, gaining 1,225.1 points (0.89%), while also touching a low of 136,498.16. Market analysts noted that the surge was supported by strong workers’ remittances, robust auto sales, and a significant rise in foreign exchange reserves.
Mohammad Sohail, CEO of Topline Securities, stated that the rally was largely propelled by banking stocks, as investors anticipate attractive dividend payouts. “This recent rally is led by banking stocks as investors feel that banks’ dividend payout will remain attractive,” he said. Economist AAH Soomro added that while the market is consolidating after a sharp rally, the fundamentals remain strong for a continued upward trend, with all eyes now on the upcoming earnings season.
Pakistan’s economic outlook received a major boost as workers’ remittances hit an all-time high of $38.3 billion in FY25, marking a 27% year-on-year increase. In June alone, inflows reached $3.4 billion, up 8% compared to the same month last year. Additionally, the State Bank of Pakistan (SBP) reported that its forex reserves surged by $1.8 billion in a week, reaching $14.5 billion—the highest in 39 months. With commercial banks’ reserves included, the country’s total reserves surpassed $20 billion for the first time in three years.
Market experts predict sustained bullish momentum, supported by strong remittances, elevated forex reserves, and improving macroeconomic indicators. Investors are closely monitoring corporate earnings, the planned Panda bond issuance, and further developments on foreign funding. Meanwhile, Finance Minister Muhammad Aurangzeb hinted at a possible interest rate cut, though the final decision rests with the SBP, which maintained the policy rate at 11% in its last meeting due to inflationary risks. The central bank had previously cut rates by 1,100 basis points since June last year, signaling cautious optimism for future monetary easing.