KARACHI: A series of positive triggers continued to drive bullish momentum at the Pakistan Stock Exchange (PSX), which scaled an all-time high in two record-setting sessions, thanks to the improved economic outlook in the outgoing short week, settling for the first time above the 121,000 barrier.

The optimism following the government’s finalised agreements for a historic loan package of Rs1.275 trillion with approximately 18 commercial banks to address circular debt sent the benchmark index to new highs. The other key positive development was the approval of $800 million loan by the Asian Development Bank under Pakistan’s public finance programme.

In May, inflation, as measured by the Consumer Price Index, saw a significant increase, rising to 3.5pc from a record low of 0.3pc in April. This sudden spike could be a major concern for investors, as it may halt the ongoing trend of interest rate cuts by the State Bank of Pakistan.

The current momentum suggests that the KSE-100 index may be poised to test the 125,000 level in the near term. However, a decisive and sustained close above the 121,000 mark, a key technical resistance, will be critical to confirm the continuation of this bullish trend.

AKD Securities Ltd said the market continued its bullish momentum throughout the week, driven primarily by investor confidence ahead of the upcoming budget. Overall, the opinion on the street remains that a stable fiscal environment is necessary to continue, with no significant shift in existing tax structures for individuals and businesses alike.

Reflecting this optimism, the benchmark KSE 100 index surged by 1,950 points or 1.6pc to close at 121,641 points week-on-week. However, market participation fell, with the average daily traded volume falling by 0.2pc to 660 million shares, down from 662 million shares in the preceding week.

On the macroeconomic front, the trade deficit stood at $2.6bn for May. Regarding sectoral developments, cement offtake reached 4.65 million tonnes in May, up 9pc year-on-year, driven by higher domestic demand.

Cement sales are likely to grow by 6pc year-on-year in FY26, primarily due to a pickup in construction activities supported by declining interest rates and a lower inflationary environment. Meanwhile, OMC industry offtake showed an inclining trend as well, clocking in at 1.53m tonnes, up 10pc year-on-year.

The rupee depreciated by 0.05pc against the greenback to Rs282.17.

Other major news developments during the week included Pakistani officials meeting with US trade authorities next week; the IMF and Pakistan nearing a consensus on a cut in tax rates for the salaried class, with a plan to hike interest rates on income from bank deposits by 2pc and the government aiming for 4.2pc growth in FY26.

Sector-wise, power generation and distribution, textile weaving, modarabas, leasing companies and investment banks and companies were amongst the top performers. On the other hand, vanaspati and allied industries, synthetic rayon, transport, cable and electrical goods and paper and board were amongst the worst performers.

Flow-wise, major net selling was recorded by Foreigners and mutual funds, with net sales of $ 14.7m and $ 11.4m, respectively. On the other hand, companies absorbed most of the selling with a net buy of $8.6m.

AKD Securities expects budget-related developments to influence short-term market sentiment. The potential for single-digit interest rates may contribute to a favourable outlook over time.

The KSE-100 Index is expected to continue its upward trend, aiming for a target of 165,215 points by the end of December.

Published in Dawn, June 7th, 2025