ISLAMABAD: Pakistan’s equity market rose sharply on Monday, extending the New Year rally as investors responded to easing macroeconomic signals and asset-allocation inflows. The benchmark index added nearly 7,000 points over the first three sessions of 2026, reflecting strong momentum at the start of the year.
The Pakistan Stock Exchange’s KSE-100 Index climbed to an intraday high of 181,790.12, gaining 2,755.19 points, or 1.54%, from the previous close of 179,034.93. Meanwhile, the session’s low stood at 179,535.46, still up 500.53 points, or 0.28%. The day’s peak marked a fresh all-time intraday high for the benchmark.
Liquidity flows, easing inflation lift sentiment
Market participants attributed the rally to fresh liquidity and optimism around macro trends. Independent investment analyst AAH Soomro said investors started the year positively as they positioned portfolios for annual asset allocation, though he cautioned that markets may be moving too fast too soon.
Research houses also flagged a supportive near-term outlook. AKD Research said sentiment should strengthen on expectations of foreign portfolio and direct investment inflows. Moreover, it projected that the KSE-100 Index could extend its uptrend toward 263,800 by December 2026, supported by easing monetary conditions, improving external accounts, and steady reform momentum.
Last week, the index advanced 6,634 points, or 3.8% week-on-week, to a record close of 179,035. Softer-than-expected December 2025 inflation at 5.6% reinforced expectations of further monetary easing by the central bank.
Macro indicators reinforce bullish tone
On the macro front, Pakistan’s trade deficit widened 24% year-on-year to $3.7 billion in December 2025, while GDP growth reached 3.7% year-on-year in the first quarter of FY26. Meanwhile, State Bank of Pakistan reserves rose $13 million to $15.9 billion, and the rupee appreciated slightly to 280.11 per dollar.
Additionally, weekly inflation eased, investment talks gained traction, and plans for Pakistan’s first Panda bond added to the market’s upbeat tone.
