PSX Opens Strong as Budget Buzz and IMF Talks Drive Market Optimism
The Pakistan Stock Exchange (PSX) began the week on a bullish note following the Eid holidays, with the KSE-100 Index rising over 500 points in early trading hours on Tuesday. At 11:30 AM, the benchmark index stood at 122,161.81, up 0.43% or 520.81 points, as investors repositioned ahead of Budget 2025–26.
The rally was broad-based, with buying momentum observed across key sectors:
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Commercial Banks: HBL, MCB, MEBL
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Fertilizer and Refinery: PRL, WAFI
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Oil & Gas Exploration and OMCs: MARI, OGDC, POL
Budget Anticipation Lifts Sentiment
The sharp uptick comes as the federal government is set to unveil the Rs17.6 trillion Budget for FY2025–26 later in the day. Finance Minister Muhammad Aurangzeb will present the budget in the National Assembly, along with the Finance Bill 2024, as required by Article 73 of the Constitution.
Investors are closely watching for:
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Tax reforms and new revenue measures
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Subsidy cuts or restructuring
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Public sector development allocations
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Privatization and SOE restructuring commitments
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Signals on fiscal discipline tied to a potential IMF agreement
Last Week Recap: Optimism Already in Play
During the previous trading week, which had only four sessions due to the Eid break, the PSX posted strong gains, with the KSE-100 climbing 1.6% or 1,950 points, closing at 121,641 points.
This sustained momentum reflects growing optimism over Pakistan’s engagement with the IMF, which many see as critical to restoring macroeconomic stability and investor confidence in the face of rising external obligations and currency fragility.
Global Markets: Trade Talks Fuel Broader Risk Appetite
The PSX rally is also underpinned by global tailwinds, as US-China trade talks continue for a second day in London. Positive rhetoric from President Donald Trump and signs of potential de-escalation have helped lift regional and global equities.
Key movements:
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MSCI Asia-Pacific (ex-Japan): +0.5%
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Nasdaq Futures: +0.62%
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S&P 500 Futures: +0.43%
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EUROSTOXX 50 Futures: +0.1%
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FTSE Futures: +0.1%
The improving international risk environment adds fuel to Pakistan’s domestic market momentum, particularly for sectors reliant on foreign capital flows and external demand dynamics.
Outlook: Budget and Beyond
The direction of the PSX in the coming days will hinge on:
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The fiscal stance and revenue generation strategy laid out in the budget
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Clarity on IMF negotiations and structural reform commitments
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Market response to sector-specific policies such as tax exemptions, subsidies, and regulatory measures
While the market remains vulnerable to macroeconomic challenges, including debt sustainability, inflation, and currency pressure, the post-Eid rally suggests a cautious yet constructive outlook—contingent on clear signals from policymakers.
