The Pakistan Stock Exchange (PSX) reached new heights on Monday as the benchmark KSE-100 index surged past the 133,000 points mark during intraday trading. The index gained 1,771.48 points, or 1.34 percent, to reach 133,720.54 points, up from the previous close of 131,949.06 points. Analysts attributed the bullish sentiment to a favorable taxation regime for equities following the passage of the federal budget and the increasing likelihood of equities outperforming other asset classes.
Awais Ashraf, director of research at AKD Securities, said, “A favourable taxation regime for equities and the increasing likelihood of equities outperforming other asset classes, amid improving macroeconomic indicators and lower inflation, have channelled flows towards equities.”
He also highlighted factors such as the continuation of monetary easing, fiscal discipline, a strong external account, and a focus on structural reforms as key drivers keeping equities in the spotlight. Yousuf M. Farooq, research director at Chase Securities, commented, “We believe the market is firmly in Phase 2 of the bull run, marked by rising retail participation, higher trading volumes, and broad-based gains across sectors.”
Farooq noted that the passage of the Finance Act 2025-26 with minimal surprises, geopolitical calm, and optimism around potential agreements with the United States have contributed to improving investor confidence.
However, he cautioned retail investors to focus on long-term investing, stay consistent with their risk appetite, and avoid overreacting to short-term fluctuations.
Psx hits record milestone
The upbeat sentiment has been further bolstered by stabilizing macroeconomic indicators.
Inflation eased to 3.2 percent in June from 3.5 percent in May, while the trade deficit narrowed to $2.3 billion for June, down 9 percent month-on-month and 3 percent year-on-year. The PSX’s strong performance builds on last week’s positive opening to the new fiscal year, when the index hit a then-record high of 131,949.06 points. During the week ending July 4, 2025, the index gained 7,570 points, or 6.1 percent, driven by improving macroeconomic indicators, foreign inflows, and strong investor sentiment.
The rally extended momentum from the previous fiscal year (FY25), which saw the PSX ranked as the best-performing regional bourse, delivering a 60 percent annual return. As trading continues, buying has been observed in key sectors including automobile assemblers, commercial banks, oil and gas exploration companies, OMCs, and refinery. The market’s performance remains closely tied to international developments, with investors monitoring the impact of US trade policies and global economic trends on the overall economic environment.
