ISLAMABAD: The bulls returned to the Pakistan Stock Exchange (PSX) on Friday, as the benchmark KSE-100 index surged by nearly 1,600 points during the first trading session, marking a strong rebound just a day after the federal budget for FY2025-26 was passed.
By the close of the morning session, the KSE-100 had jumped 1,581.77 points, or 1.3%, reaching 123,628.23—up from the previous close of 122,046.46.
Awais Ashraf, Director of Research at AKD Securities, attributed the rally to investor confidence following the budget’s passage:
“The approval of the federal budget—without aggressive revenue-enhancing measures and with some relief for salaried individuals and businesses—has been positively received by the market.”
On Thursday, the National Assembly passed the Rs17.57 trillion federal budget for FY25-26, despite opposition calls to delay the vote and seek public consultation on the proposals.
Ashraf noted that geopolitical developments have also played a role in improving investor sentiment.
“The ceasefire between Iran and Israel has allowed investors to refocus on improving macroeconomic indicators. With inflation easing and a record current account surplus, there’s growing anticipation that interest rates may fall to single digits.”
He added that stocks in the power sector, oil and gas exploration, and their supply chains are gaining traction amid expectations that the government will move to resolve circular debt issues before the end of the fiscal year.
“We believe this rally can be sustained, especially if the central bank continues its monetary easing cycle. Inflation could dip below the government’s FY25 estimate of 4.5% in the following year,” Ashraf concluded.
The market’s sharp recovery follows a brief correction on Thursday, when profit-taking halted a two-day rally sparked earlier in the week. On Tuesday, the index had surged by over 6,000 points after U.S. President Donald Trump brokered a ceasefire agreement between Iran and Israel, ending a 12-day conflict.
