KARACHI: The Pakistan Stock Exchange (PSX) on Monday extended its record-setting rally for a second consecutive session, propelling the benchmark KSE-100 index past the 173,000 mark amid optimism over talks with the United Arab Emirates (UAE) to convert $1 billion of its financial support into long-term investment aimed at easing Pakistan’s external debt burden.

According to Topline Securities, bullish sentiment dominated the market as investors drew confidence from reports that a UAE entity is considering the acquisition of a strategic stake in the Fauji Group. The prospective investment has fuelled expectations that around $1bn in liabilities could be settled, while hopes have also strengthened that the remaining $2bn loan may be rolled over, significantly reducing near-term financing pressures.

Riding this wave of optimism, the KSE-100 index climbed as much as 2,010 points intraday before closing at 173,896, up 1,495 points or 0.86 per cent.

Gains were broad-based, with Fauji Fertiliser, United Bank Ltd, Pakistan Telecommunication Company Ltd, Engro Fertiliser and Systems Ltd emerging as the leading contributors, together adding 957 points to the benchmark.

Benchmark KSE-100 index tops 173,000

Market activity remained robust. The total volume rose 7.52pc to 858 million shares, while the traded value rose 12.62pc to Rs42.8bn. WorldCall Telecom topped the volume chart, with 52.8 million shares changing hands.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said the PSX posted another strong session as investor sentiment remained upbeat following the deputy prime minister’s press conference over the weekend and the announcement that the UAE intends to invest $1bn in Fauji Foundation shares. The development, he added, has bolstered confidence in the group’s listed companies.

Looking ahead, analysts believe the prevailing momentum could extend into the final two sessions of CY25, potentially paving the way for further record highs on the back of supportive corporate developments and an improving macroeconomic outlook.

However, the 172,000-point level remains a key support for the market. A decisive break below this threshold could trigger a fresh phase of consolidation.

As a result, Fauji Foundation group firms, including FFC was up 2.77pc), Mari Energies (1.74pc), FCCL (4.68pc), AKBL (3.75pc) and FFL (10.02pc), collectively added 736 points to the index.

Published in Dawn, December 30th, 2025