PSX hits all-time high amid optimism on economy, geopolitics

• KSE-100 index gains over 2,000 points in intraday trading. 
• Analysts cite optimism on economy, IMF programme.
• Strong liquidity inflows fuel fresh market rally.
  

Buying rally continued at the Pakistan Stock Exchange (PSX) on Friday as the KSE-100 Index reached a new all-time high of 161,688.01 points in intraday trading, driven by strong liquidity inflows, improved geopolitical outlook, and signs of domestic macroeconomic stability.

The benchmark KSE-100 Index touched an all-time high of 161,688.01 points in intraday trade, up 2401.97 points or 1.51% from the previous close of 159,280.09.

Analysts attributed the surge to strong liquidity inflows, backed by improved geopolitical outlook and signs of domestic macroeconomic stability. 

Highlighting the continuation of the recent trends, Head of Research at Lucky Investment Muhammad Saad Ali attributed the PSX performance to market optimism for the economic outlook.

"All economic indicators are moving in the right directions, the IMF programme is on track and side by side we are also in a good place with regards to our foreign policy and our relations with countries which are our bilateral lenders, such as China, Saudi Arabia and the US."

"So both of these [factors] have been driving market optimism and the investors' sentiment is at its highest level that we've seen for many years, he added.

The 160,000-mark was something that was expected to happen by the end of this year, but has already happened, the expert noted.

AAH Soomro, an independent investment and economic analyst, added: "The economy is moving in the right direction, which is supporting investor confidence." 

However, he also advised caution, highlighting the need to evaluate the sharp upward trend. "While the rally reflects positive sentiment, unidirectional market movements often call for healthy corrections."

Pakistan and the International Monetary Fund (IMF) commenced technical-level talks on Thursday, during which the Fund raised concerns over a substantial revenue shortfall against the Federal Board of Revenue’s (FBR) twice-revised downward target for the last fiscal year.

Simultaneously, Islamabad secured $1.377 billion in external loans during July and August of the current fiscal year (FY2025-26), against a full-year projection of $19.9 billion. Bilateral inflows totalled $232 million, including $200 million from Saudi Arabia under an oil facility.

Multilateral creditors, including the World Bank, Asian Development Bank, Asian Infrastructure Investment Bank, and Islamic Development Bank, disbursed $780 million, with the World Bank as the lead contributor, The News reported.

During the talks, the IMF questioned why the FBR faced a shortfall of Rs1.2 trillion against its original target of Rs12.97 trillion for FY2024-25, despite the imposition of Rs1.3 trillion in additional taxes. The FBR ultimately collected Rs11.74 trillion after two downward revisions. Officials attributed the gap to unrealised recoveries of Rs250 billion from pending court cases.

Meanwhile, Prime Minister Shehbaz Sharif held his first meeting with United States President Donald Trump at the Oval Office in Washington on Friday.

According to a statement from the Prime Minister’s Office, the discussions covered regional security, counter-terrorism cooperation, and a range of bilateral matters.

Speaking during a warm and cordial meeting with President Trump at the Oval Office, the prime minister said the US leader’s bold, courageous, and decisive actions had helped facilitate the ceasefire between Pakistan and India, thereby averting what he called a potential "major catastrophe" in South Asia, a statement issued by the Prime Minister's Office read.

While discussing the situation in the Middle East, the premier lauded President Trump's efforts to bring about an immediate end to the war in Gaza, especially his initiative to invite key leaders of the Muslim world in New York, earlier this week, for a comprehensive exchange of views for restoration of peace in the Middle East, in particular Gaza and the West Bank.