KARACHI: The Pakistan Stock Exchange (PSX) continued its impressive run, breaking a new milestone as the benchmark KSE-100 index surged past 165,000 for the first time in its history. The record-setting rally marks the fourth consecutive session of bullish trading, mainly driven by robust local institutional buying and improving geopolitical dynamics.
Analysts had initially projected the KSE-100 index would reach this milestone by the end of the current calendar year, but stronger-than-expected rallies, spurred by positive geopolitical shifts and less severe-than-expected flood-related losses, pushed the market past expectations much earlier.
Investor optimism has also been supported by the International Monetary Fund’s (IMF) ongoing economic review under the country’s $7 billion Extended Fund Facility (EFF). The IMF mission is currently reviewing Pakistan’s progress under the programme, which includes structural reforms, fiscal consolidation, and efforts to control inflation. The outcome of this review will determine whether Pakistan qualifies for the third tranche of $1bn.
According to market experts, Pakistan’s relations with the Middle East and the United States have improved, contributing to an overall positive market sentiment. “Record buying by local funds in September has led to the index reaching a new high. Despite high leverage, the overall euphoria stems from improving geopolitical ties,” Mohammed Sohail, CEO of Topline Securities Ltd, told Dawn.
At the close of the session, the KSE-100 index finished at 165,493 points, up by 1,645 points or 1 per cent, after touching an intraday high of 166,556.
The market strength was driven by strong performances from key banking and industrial stocks, including United Bank, Habib Bank, Meezan Bank, Bank Al-Habib, and Engro Holdings, which collectively contributed 1,257 points to the index’s gains.
However, the rally was partially moderated by profit-taking in major stocks such as Fauji Fertiliser, Oil and Gas Development Company, and Pakistan State Oil (PSO), which combined to reduce the overall index gains by 280 points.
Investor participation remained healthy, with trading volume rising by 5pc to 1.343 billion shares, while the trade value surged by 16.73pc to Rs76.6 billion. WorldCall Telecom led the volume chart, with 113 million shares traded during the day.
Ali Najib, Deputy Head of Trading at Arif Habib Ltd, highlighted that the PSX’s strong performance was also driven by investor optimism surrounding the upcoming earnings season. “The market is buoyed by expectations of strong third-quarter results for the fiscal year 2025, with healthy dividend payouts expected to further fuel investor confidence,” he said.
As institutional flows remain stable, analysts believe the bullish momentum could continue into the next quarter. This, combined with positive earnings reports, sets the stage for a strong start to the upcoming period.
Despite concerns surrounding Pakistan’s fiscal challenges, including inflation and external sector imbalances, analysts suggest that the stock market’s current positive momentum reflects the broader optimism among investors. The IMF’s review, which will assess fiscal reforms and Pakistan’s compliance with EFF targets, remains a key focal point for the country’s economic outlook.
As the market maintains its upward trajectory, the coming weeks will likely reveal how key economic developments — both domestic and international — continue to shape investor sentiment and stock market performance.
Published in Dawn, October 1st, 2025
