The Pakistan Stock Exchange (PSX) witnessed a spectacular rally on Thursday, with the benchmark KSE-100 Index climbing to a record intraday high of 138,168.37 points, marking a 1.31% gain (1,788.41 points). Investor sentiment remained bullish amid strong foreign exchange reserves and significant mutual fund investments. Analysts credited the surge to post-budget shifts, where funds moved from money markets to equities following higher tax impositions.
Liquidity-Driven Rally to Sustain Momentum
Independent economic analyst AAH Soomro noted that mutual funds have poured over $50 million into equities, driving the upward trend. He predicted the KSE-100 could soon breach the 140,000-point mark, supported by sustained liquidity. The optimism was further bolstered by the State Bank of Pakistan’s (SBP) forex reserves, which surged to $14.51 billion at FY2025’s close—exceeding IMF’s $13.9 billion target.
Forex Reserves Rebound After Debt Rollovers
The reserves saw a dramatic recovery from $9.39 billion in June 2024, aided by $3.1 billion in commercial borrowings and $500 million from multilateral lenders. Earlier, a $2.66 billion debt repayment had caused a dip, but timely rollovers—including $3.4 billion in Chinese loans—restored stability. Of this, $1.3 billion refinanced prior debts, while $2.1 billion renewed existing reserves.
Market Momentum Builds on Previous Gains
The rally followed Wednesday’s uptick, where the KSE-100 rose 440.1 points (0.32%) to close at 136,379.96 points. With forex stability and increasing investor confidence, analysts expect the bullish trend to continue, potentially setting new milestones for Pakistan’s equity market.