ISLAMABAD: The Pakistan Stock Exchange (PSX) extended its record-breaking rally on Tuesday, fueled by positive investor sentiment and a strengthening economic outlook.
The benchmark KSE-100 Index surged to an all-time intraday high of 137,727.63, gaining 1,225.1 points or 0.89%. The day’s low stood at 136,498.16, as momentum remained strong throughout the session.
Key Drivers of the PSX Rally
The ongoing market surge is being driven by a combination of bullish factors: a historic rise in workers’ remittances, robust auto sector sales, and a sharp increase in foreign exchange reserves.
Topline Securities CEO Mohammad Sohail attributed the index’s latest high to aggressive buying by local funds, particularly in the banking sector. “The rally is led by banking stocks, as investors expect strong dividend payouts,” he said.
Economist AAH Soomro added, “There seems to be consolidation after a sharp rally, but the fundamentals for a continued bull run remain solid. Investor attention is now shifting to the upcoming earnings season.”
Record Remittances & FX Reserves Boost Sentiment
Investor confidence has been further lifted by a record $38.3 billion in workers’ remittances for FY25, a 27% increase year-on-year. In June alone, inflows hit $3.4 billion, marking an 8% rise from the same period last year.
The State Bank of Pakistan (SBP) also reported a sharp week-on-week increase of $1.8 billion in foreign exchange reserves, bringing total reserves to $14.5 billion—a 39-month high. Including commercial bank holdings, Pakistan’s total foreign reserves have now surpassed $20 billion for the first time in three years.
Outlook: Corporate Earnings, Panda Bonds & Policy Signals in Focus
With strong macroeconomic indicators supporting the rally, analysts expect positive market momentum to continue in the near term. Key developments to watch include corporate earnings, progress on Panda bond issuance, and foreign funding inflows.
Finance Minister Muhammad Aurangzeb recently hinted at the potential for a monetary policy easing, saying there’s room for an interest rate cut, though the final decision rests with the SBP.
In its last meeting, the SBP held the benchmark interest rate steady at 11%, citing external uncertainties and inflation concerns. Previously, the central bank had cut the policy rate by 100 basis points in May, reducing it from an all-time high of 22%—a total decline of 1,100 basis points since June.
With macroeconomic confidence improving, investors appear increasingly bullish on Pakistan’s equity market, positioning it for further gains in the weeks ahead.
