PSX rallies to all-time high on defence deal
KARACHI: The Pakistan Stock Exchange (PSX) closed at a historic high on Thursday, reaching near the 158,000-point mark, despite challenges posed by recent floods and a negative current account in August.
The benchmark KSE 100 index surged by 1,775.65 points or 1.14 per cent, closing at 157,953.47, driven by investor optimism following the signing of a Strategic Mutual Defence Agreement (SMDA) between Pakistan and Saudi Arabia.
The defence deal, signed during Prime Minister Shehbaz Sharif’s visit to Riyadh, was seen as a major milestone, enhancing bilateral ties and opening avenues for defence exports. The accord, which stipulates that aggression against one country will be considered aggression against both, has strengthened Pakistan’s geopolitical position in the Middle East. This development helped propel the PSX to an intraday high of 1,904 points.
The current account recorded a deficit of $245 million in August, following a $379m deficit in July. This is a sharp contrast to the $82m deficit posted in August 2024.
Blue-chip stocks underpinned the rally, with key companies such as Engro Holdings, National Bank of Pakistan, Mari Energies, United Bank, and Bank of Punjab collectively contributing 733 points to the index. Market participation surged, with trading volumes up 30.66pc to 1.95bn shares, while the value of shares traded increased 16.54pc to Rs56.9bn. Cnergyico PK emerged as the volume leader, with 213m shares traded.
Ali Najib, Deputy Head of Trading at Arif Habib Ltd, noted that after a brief period of consolidation, the PSX had made a strong comeback, approaching the 158,000-point psychological barrier.
Along with the domestic rally, global factors also supported market sentiment. The US Federal Reserve’s recent 25bps interest rate cut and its signals of further easing in 2025 boosted investor confidence, particularly in emerging markets.
On the domestic front, the government’s successful raising of Rs195bn in T-bills, surpassing its Rs175bn target, was another positive indicator. The decision to reject high-cost Pakistan Investment Bond (PIB) bids further reflected confidence in easing monetary conditions, which is expected to encourage more investment in equities.
Published in Dawn, September 19th, 2025
Read Comments