Stock Market Hits New Record, Index Crosses 135,000 Points

In a striking show of investor confidence, the Pakistan Stock Exchange (PSX) saw its flagship KSE‑100 Index surge past the 135,000-point milestone—an all-time high reflecting renewed economic optimism. Buoyed by solid corporate earnings, stable macro indicators, and strong foreign interest, Monday’s rally solidifies a bullish trend that has been building since early July.

Several interlinked factors are fuelling this remarkable rally:

Solid earnings: Corporate results, especially from banks and the energy sector, surpassed expectations 

Low inflation & oil rise: CPI around 3.2%  and bullish oil prices supported market sentiment 

Budget 2025–26 confidence: Investor-friendly budget, including no tax hikes on dividends and CGT, underpins optimism 

Trade deal hopes: Potential US‑Pakistan agreement and improved external account outlook act as catalysts 

Foreign investment & IMF support: External inflows and expected IMF disbursements cushion risk sentiment 

• PM Shehbaz Sharif: Called the milestone “a clear reflection of business community confidence” and praised policy stability 

• Market Analysts:

• Arif Habib highlighted the role of low inflation, oil, and power tariff cuts 

• Nukta.com: Emphasized banking, cement, fertilizer stocks as key rally drivers 

• Trading Data: NRF volumes and institutional purchases surged, signaling deeper investor conviction 

Broad-based strength pushed major sectors higher, although volume-weighted sector-specific data is pending.

• Banking: Dividends and earnings pushed the sector ahead

• Energy & fertilizers: Higher commodity prices helped related stocks

• Textiles & autos: U.S. trade optimism and exports supported activity

Despite momentum, several risks merit caution:

• Macro imbalances: Currency stability, debt repayments, and IMF compliance remain crucial

• Global volatility: U.S. tariffs and geopolitical shocks could spill over

• Profit-taking: After rapid gains, short-term corrections may occur

• Inflation & interest rates: Upcoming CPI and SBP monetary policy signals

• Corporate earnings: Q2 results set to flow through July–August

• Trade developments: Any news on formalizing deals with the U.S. will be market-sensitive

• Foreign inflows: Continued external investment is vital for sustainability

• Technical barriers: 140,000 and upward will test bullish resolve

• Consumer sentiment: Market performance bolsters confidence, supports spending

• Business climate: Positive capital markets reflect a pro-growth environment

• Government credibility: Confirms policy effectiveness ahead of IMF reviews

Monday’s closing of 135,391 points on the KSE-100 index marks a watershed moment for Pakistan’s financial markets—an outcome of solid earnings, macro stability, and investor sentiment. Yet, sustainability hinges on maintaining economic discipline, ensuring fair governance, and balancing global uncertainties. If Pakistan can navigate these challenges, its capital markets may prove to be a model in frontier-market equity performance.