KSE-100
The equity market extended its upward momentum on Thursday, with the KSE-100 Index reaching a new all-time high during early trading sessions. Investors showed sustained buying interest across major sectors, pushing the benchmark index further along its rally path.
This positive market sentiment is largely driven by easing geopolitical tensions and optimism about a stable economic trajectory under the supervision of the International Monetary Fund (IMF).
The Pakistan Stock Exchange’s (PSX) flagship index surged to an intra-day peak of 120,668.42 points, gaining 736.97 points or 0.61% from the previous close of 119,931.45 points. Even the session’s low of 120,210.56 points was significantly above the prior close, reflecting strong investor confidence and a persistent bullish trend throughout the day.
“This rally is a direct continuation of the relief investors felt following the de-escalation of Indo-Pak tensions,” said AAH Soomro, an independent investment and economic analyst. “The market remains attractive, with investors steadily deploying funds across promising sectors.” He further noted that a successful agreement with the IMF on the federal budget is expected to spur growth in key sectors, potentially driving the KSE-100 to 150,000 points within the next year.
Investor confidence has also been buoyed by Pakistan’s economic performance. For the first time, the country’s nominal Gross Domestic Product (GDP) surpassed the $400 billion mark, according to provisional estimates approved by the National Accounts Committee (NAC).
Pakistan’s economy expanded to Rs114.7 trillion (approximately $411 billion) in the fiscal year 2025, up from Rs105.1 trillion ($372 billion) in the previous year. While GDP growth was recorded at 2.68% for the year, quarterly growth remained modest at 1.37% in Q1 and 1.53% in Q2, falling short of the government’s 3.6% target.
Meanwhile, negotiations between the government and the IMF continue over the upcoming budget. The IMF is advocating for increased taxation on agriculture-related inputs, including doubling the Federal Excise Duty (FED) on fertilisers from 5% to 10%, and introducing a 5% tax on pesticides.
Prime Minister Shehbaz Sharif is reportedly pressing the IMF to reconsider these proposals, highlighting the potential adverse impact on the farming community.
Additionally, the IMF is pushing for the implementation of an Agriculture Income Tax (AIT) starting July 1, 2025, alongside broader tax reforms aimed at expanding the tax base, such as uniform turnover thresholds for income tax and GST registration.
Initial estimates suggest that AIT could generate Rs40–50 billion in revenue from provincial collections in the short term.
The recent rally builds on the strong performance from the previous day, when the KSE-100 Index closed at 119,931.45, marking a gain of 960.33 points or 0.81%. As investor optimism grows, the market is poised for continued upward momentum, supported by improving economic indicators and hopeful policy developments.
