KSE-100 Skyrockets Beyond 124,000 as Budget 2025-26 Spurs Investor Optimism
The Pakistan Stock Exchange (PSX) opened Wednesday on a strong note, with the benchmark KSE-100 Index surging over 2,300 points, crossing the 124,000 mark during intra-day trading. At 12:05 PM, the index stood at 124,325.49, registering a gain of 2,301.05 points or 1.89%.
The rally was driven by across-the-board buying in key sectors, including:
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Automobile assemblers
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Cement manufacturers
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Commercial banks
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Oil & gas exploration companies
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Oil marketing companies (OMCs)
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Power generation stocks
Index-heavyweights such as HUBCO, PSO, MARI, OGDC, PPL, POL, HBL, MCB, MEBL, and UBL were all trading firmly in the green, lifting overall investor sentiment.
Why the Rally?
According to market experts, the lack of negative surprises in the Federal Budget 2025-26 helped restore investor confidence.
“No major changes on taxation, especially the retention of 15% capital gains tax on dividends, supported the rally,”
— Samiullah Tariq, Head of Research at Pak Kuwait Investment Company.
In his post-budget remarks, Prime Minister Shehbaz Sharif said the bullish performance was a vote of confidence in the government’s “people-friendly” policies.
Key Highlights from Budget 2025-26
Presented by Finance Minister Muhammad Aurangzeb on Tuesday, the Rs17.573 trillion budget aims to jumpstart economic productivity and export-led growth. Here are some notable targets:
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GDP growth rate: Targeted at 4.2% (up from 2.7% in FY2024-25)
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Inflation target: 7.5%
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Fiscal deficit: Reduced to 3.9% of GDP (Rs5,037 billion)
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Primary surplus: 2.4% of GDP
Aurangzeb called the budget the start of a long-term structural transformation aimed at rewriting the country’s “economic DNA.”
Global Market Context
Internationally, markets responded cautiously to news of progress in US-China trade talks. MSCI’s index of Asia-Pacific shares outside Japan rose 0.2%, while Japan’s Nikkei and Australia’s S&P/ASX200 each climbed 0.4%.
However, global uncertainty around tariffs, inflation, and US Treasury auctions continues to weigh on sentiment.
Outlook: Can the Rally Hold?
While Wednesday’s surge marks a significant vote of confidence in Pakistan’s economic direction, sustainability depends on several factors:
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Timely execution of budgetary reforms
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Confidence-building with the IMF and global lenders
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Managing inflation and currency stability
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Continued foreign portfolio investment (FPI) inflows
If these variables align positively, the KSE-100 could see further upside, particularly with relatively attractive valuations and improving macro indicators.
