PSX climbs to record high on earnings, circular debt optimism

• KSE-100 Index closed at 146,929.84 points, gaining 1,547.05 points, or 1.06%.
• Index touched intraday high of 147,005.17 points, up 1,622.38 points, or 1.12%.
• Session's low was recorded at 145,258.49, down 124.3 points, or 0.09%.

The equity market began the week on a strong note on Monday, climbing to fresh record territory amid sustained buying interest driven by robust corporate results and optimism over circular debt resolution.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index settled at an all-time high of 146,929.84 points, up 1,547.05 points, or 1.06%, from the previous close of 145,382.79.

During the session, the index climbed to an intraday high of 147,005.17 points, gaining 1,622.38 points, or 1.12%, before retreating to a low of 145,258.49 points, reflecting a loss of 124.3 points, or 0.09%.

“Stellar corporate results, improving sentiment and liquidity are the driving force behind the continued rally that took a slight breather on Friday. Market will react to results and headlines about circular debt payments,” said Ahfaz Mustafa, CEO of Ismail Iqbal Securities.

Macroeconomic indicators presented a mixed picture. The trade deficit for July 2025 widened sharply by 44% year-on-year (YoY) to $2.8 billion due to higher imports, while remittances rose 7% YoY to $3.2 billion, though declining 6.0% month-on-month (MoM). 

The State Bank of Pakistan’s (SBP) foreign exchange reserves slipped by $72 million week-on-week (WoW) to $14.2 billion, largely on account of external debt repayments. The rupee appreciated modestly by 0.1% WoW, closing at Rs282.47 against the US dollar.

On the policy front, the government made significant headway in power sector reforms, slashing circular debt by Rs780 billion to Rs1.6 trillion and unveiling a five-year privatisation roadmap involving 24 companies, with 10 – including Pakistan International Airlines – set for sale in the first phase.

Textile exports jumped 33.7% YoY in July 2025 to $1.69 billion, up from $1.27 billion in the same month last year. In the T-bill auction, the SBP raised Rs386 billion against a Rs400 billion target, with yields rising by 5-30 basis points (bps) across maturities.

During the outgoing week, the market staged a remarkable rally, closing at 145,383 points, up 4,348 points or 3.08% WoW, marking a record-high closing on Thursday at 145,647 points before a minor pullback in the final session. 

On Friday, the market opened strong, taking the KSE-100 to an intraday high of 146,813.43, before profit-taking dragged it to a low of 144,917.19. It eventually settled at 145,382.80, down 264.34 points or 0.18%.